New Zealand based Phoenix Forex promised 50%+ returns from users of its OakFX trading system.
It comes as no surprise that the follow up to the story on Phoenix Forex that we reported back at the end of August is a liquidation proceeding.
Following the warning issued by the FMA back then, the company’s assets are now to be sold to repay creditors. The company has been distributing the OakFX forex trading system which claimed returns of up to 50%-65% per annum.
Documents at the New Zealand Companies Office are showing that the firm has been placed under liquidation by the McDonald Vague company. Meanwhile as reported by The New Zealand Herald the businessman in charge of the company Mark Brewer avoided home detention, as he was breaching the terms of his second bankruptcy that was settled in 2010. One of the conditions was that he was barred from participating in the direct management of a company.
The case can clearly demonstrate that anxious will of mainly newbie forex investors to participate in a get rich quick scheme usually ends up in a lot of humiliation and a little money loss. In this particular case however, the purchase of the system was valued at $25 000, so one could argue that the amount of money lost was rather substantial.
It seems that traders are not going to stop searching for the Holy Grail, however it is important for financial regulators to uncover such schemes on time, so the credibility of the forex industry as being a fair and square business doesn’t suffer.