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Wednesday, March 5, 2008

FX Active Liquidation

FX Active Liquidation
Following the article and appeal I made on my fxtraderman blog earlier today another drama involving Forex scams in South Africa is about to unfold. FxActive a prominent Forex Market Maker in South Africa closed their trading platform to traders and fund managers under the pretext of system maintenance about six weeks ago.

No explanation was offered or notification sent to clients explaining the necessity for the closure or maintenance of the platform. (I wonder how many traders had open positions at the time of the closure possibly wiping out their accounts with margin calls.)

Attempts by investors to contact the company to ascertain the reasons for the closure have failed. Strangely the company still maintains offices and pay staff every month, one can only speculate that investors funds are being used to fund this extravagance.

Traders from all over the country are now reporting that they have been unable to withdraw their funds from the company. The excuses for non payment offered by the company range from "Audits" due to a pending takeover by a large European Trading Platform and the imminent sale of the company.

None of these excuses can be verified or have come to fruition and can only be regarded as tactics to stall investors whilst the company milks every last cent out of investors funds.

In recent years South African investors have been devastated by the closure of Forex Trading Companies. Leadergard the largest company a few years ago, closed owing investors three hundred million Rand or more. Recent scams in Durban involving Forex Direct CC, Tyraz Investments cc, and Inrex Forex relieved investors of millions of $'s

In every case the perpetrators of these scams have lived a life of luxury whilst the investors they have stolen from are left penniless. New laws governing Financial Advisers have been introduced by the Financial Services Board to protect investors from unscrupulous brokers, however the effect of these laws will take time before everyone is fully regulated.

As FxActive were the only Forex Trading Market Maker in the country, many South African traders had no option but to deal with them due to currency control regulations governing the amount of funds individuals are allowed to take out of the country.

Whilst I have no direct evidence of any fraud commited by any member of FxActive I can only speculate about the reasons for their demise.

As I was an active participant as a trader on the FxActive platform, I have a vested interest in the outcome of any pending Liquidation and possible criminal actions brought against the company. Unfortunately I am not optimistic of any reasonable outcome, and can only assume that FxActive will probably become another statistic of the greed and corruption that has been so prevalent in the Forex Industry in our country.

1 comment:

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