Imitation, it is often supposed, is the finest form of flattery…
This adage is dependent on who is doing the imitating, however. LeapRate discovered this week that retail FX giant FXCM (NYSE:FXCM) has been the subject of an attempt by a bogus company to extort clients by creating a similar name to that of the world’s largest retail FX firm.
In this particular case, the website which attempts to dupe customers into investing by using a means which is increasingly being referred to within regulatory authorities as ‘cloning’ uses the name FXCM Money Central, which has absolutely no connection whatsoever to the NYSE-listed FX giant FXCM.
FXCM Money Central, which operates under the website https://www.fxcmoney.com, seems to be very popular on HYIP (High Yield Investment Plan) websites, which themselves are widely regarded as similar to Ponzi schemes insofar as clients invest due to the extremely high yields which are promised to depositors, and then the investors funds are used to pay out clients who invested previously, until the scheme collapses. Examples of these which feature the name FXCM Money are:
One of the most brutal examples of an attempt to win favor among unsuspecting clients can be found on a forum which is listed under this URL: https://www.payinghyiponline.com
On this section, the website claims FXCM Money is actually paying its investors, as defined in post number 69.
Upon discovering this, LeapRate immediately contacted FXCM’s Jaclyn Klein in order that the matter can be brought to the company’s attention. Ms Klein responded immediately, demonstrating that FXCM takes matters of this nature very seriously indeed. “Thank you for bringing FXCM Money to my attention” explained Ms. Klien. “I have notified compliance and legal teams here and they will have it shutdown. We will also be ensuring that forum-related comments are addressed by our internal team which is responsible for ensuring that our name is not used by unrelated entities.”
Indeed, financial services regulatory authorities across the world have made specific inroads into dealing with the practice of cloning, largely by placing warnings to the investing public on their websites in order to ensure that clients only deal with entities that are fully overseen by recognized regulators. In particular, the Financial Conduct Authority in Britain has become aware of several instances of this practice, and also New Zealand’s FMA has warned against firms which promote FX trading software which promises absurdly high and thus unrealistic payouts, exactly as per this example.
Using names of large FX firms is not necessarily new to fraudsters, with Alpari UK having suffered a similar type of imitation recently, emanating from Far Eastern websites with no connection whatsoever to Alpari UK. Alpari UK responded by producing a warning to investors to ensure they do not use those particular websites.
Being the largest retail FX company in the world, whose market share is ever increasing as a result of its acquisition campaign in which the company has purchased several client bases of rival companies, including compatriots FXDD and US MONEX subsidiary IBFX, plus entered specialist areas by acquiring niche companies such as Faros Trading, FXCM is most certainly in an enviable position.
It is therefore imperative that traders ensure that they are not duped by pretenders, and indeed are trading with FXCM itself, and similarly imperative that LeapRate conveys quite categorically that FXCM Money Central has no connection in any way whatsoever with retail FX giant FXCM. Those wishing to seek guidance should contact the National Futures Association and FXCM Customer Services for full clarification.