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Screenshot of a breaking news alert e-mail from Q2 2017
The Autorité des marchés financiers (AMF) is warning the public about proposals to invest in diamonds. Seemingly highly attractive, and often presented as a safe investment, these proposals make glowing promises of exceptional and even unrealistic returns. The AMF is calling on individual investors to exercise the greatest vigilance.
The AMF is observing a strong increase in diamond investment offers targeting the French public. It is also increasingly being called on by retail investors complaining about aggressive direct marketing on the part of these platforms or about difficulties in recovering their investment or even reaching their contact person. It would also appear that the postal addresses of these platforms or companies in prestigious locations are often fictitious, while their marketing discourse is akin to that of illegal Forex or binary options trading platforms.
Owing to the extreme uncertainty over the nature of such offers, the AMF is recommending investors not to take up the solicitations from these entities and not to communicate them to third parties, in any form whatsoever.
The AMF would remind retail investors that these investment proposals are risky and call for the greatest vigilance. In the event of fraud, the victims must file a complaint and provide the competent legal authorities with as much information as possible (including money transfer references, identified contact people, addresses, emails and Skype communication).
Lastly, the AMF reminds investors and individuals responsible for marketing investment products to follow these safety guidelines before making any investment:
- no advertising materials should make you overlook the fact that high returns always involve high risk;
- learn as much as you can about the company or intermediary trying to sell you a product (authorisation/certification, company history, location of head offices, etc.);
- only invest in a product you understand;
- ask yourself how, and by whom, the purchase price or selling price of the advertised product is set, and find out the precise terms and timeline for selling the product, especially in cases where the product invests in an asset class with low liquidity.