Kuala Lumpur: Many have fallen victims and lost thousands of ringgit, in attempts to make fast money, through the operations of illegal spot index companies, the Securities Commission (SC) said.
In a statement released here today, the SC said these spot commodity and index traders, which had set up operations in big and small towns around the country were unlicensed, and were carrying out illegal futures trading.
It said many people had been cheated by allowing themselves to believe that it was possible to get rick quick without risks.
SC strongly urges the public to be vigilant when investing with local or foreign investment companies as there are many unscrupulous parties who may be taking advantage of the current economic climate to lure investors to seemingly big-return investment activities.
It would like to remind all investors that “get-rich-quick” opportunities touted by these promoters often turned out to be “get-poor-quick” schemes.
Apart from that, the SC advised job-seekers to be cautious when taking up jobs which promise lucrative salaries, without corresponding requirement for experience or academic qualifications.
It said many of the spot commodity companies put up advertisements for normal office executive positions, and try to impress interview candidates with posh offices, in up-market locations.
Many of these companies are also registered with the Companies Commission and will even display their company registration number.
SC reminded job-seekers and potential investors that in order for any person to carry out any futures trading activities, a licence from the SC was required, and all future brokers representatives must also be licensed.
Many of these companies claimed to be “agents” for foreign trading houses, usually incorporated in jurisdiction such as Macau, Indonesia, Singapore, Hong Kong, the British Virgin Islands and the Bahamas.
Although they claim to trade their products in the foreign market, they are usually unable to provide substantial evidence of these trades being transmitted to foreign futures exchanges.
These companies frequently place recruitment advertisements for positions such as executives, administrative assistants or clerks.
Job seekers are enticed by promises of lucrative four-figure salaries.
Short listed candidate goes through an interview and upon becoming an employee, is put through a brief period of “training”.
At the end of training, the employee, is then encouraged to invest in their savings in the products as well as solicit new investors, which usually turn out to be their relatives and friends.
On the other hand investors are usually asked to pay an initial sum known as a “margin deposit” which ranges from US$3,000 to US$5,000.
Investors are then told that their investments have been relayed to the company’s foreign principal and that they are to sign a trade agreement with the company’s purported foreign principal.
As part of a ploy to trick investors, the company will show some trading profit in the investors.
However, investors will find that they are unable to cash in those gains.
Eventually, investors lose all their money.
In most cases, investors have no control over how their trading accounts are managed as they would have signed over authority to the company’s traders to execute trades on their behalf.
SC also warned the public especially victims of spot commodity and index trade to beware of a man who has been impersonating as an SC officer to gather bank account details from the public.
It said the man believed to target victims of spot commodity and index trade scams to whom he promises refunds of monies lost in these illegal trades.
SC said it had not authorised any officers to solicit details of individuals’s bank accounts for this purpose, and the public especially investors were reminded not to give out such details.
Those who are approached by such person, should contact the police or the SC immediately.
SC Complaint Unit telephone number is 03-6204 8999 and e-mail aduan@seccom.com.my.
The SC was alerted early this week about this by a person who claimed to have been approached by Encik Kamal Shamsul, allegedly from the commission from SC’s office in Petaling Jaya (PJ), asking for his bank account number and identity card number to return his money which he had lost in a spot commodity trade.
The commission said it did not have any staff member by that name, and its office is based in Kuala Lumpur, not PJ, as it has no office outside Kuala Lumpur.
Investors can visit the SC website www.sc.com.my or the investor education website at www.min.com.my for details on wise investment.-Bernama
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