This is not the first time that traders have lost a significant
amount of money through sketchy trading sites. In February,
MtGox, once the world's largest Bitcoin exchange, filed for
bankruptcy after 850,000 bitcoins, worth nearly half a
billion dollars, disappeared. MtGox CEO Mark Karpeles blamed the
loss of bitcoins on "weakness in the system."
A popular currency trading website that gained popularity with small investors because of the high rate of returns suddenly disappeared earlier this year, and it could have taken more than $1 billion with it, Bloomberg reports.
The news also serves as a warning about believing video testimonials. Many of those on secureinvestment.com were done by actors, Bloomberg said.
One 2013 thread posted on Forex Peace Army notes that securityinvestment.com suspiciously had no complaints and put out a call to members: "What do you think are they legit or is it a scam ?"
Secureinvestment.com — which was briefly more popular than the widely trusted currency trading platform forex.com — vanished in May.
Even back then, a user named Master Sergeant was dubious. He pointed some key red flags:
Secure Investment said that it traded in excess of $4.8 billion daily for more than 100,000 investors in 140 countries. The company said it posted all of its trades every day, showing which ones were winners and which were losers. The site said investors had averaged net gains of 1 percent each trading day during the past five years ...
1. No complaints doesn't necessarily mean much. It could just mean that a company doesn't really have all that many clients. Did you find anything positive about them posted in 2008-2012? 2. The trading history is just a list of numbers. Without investor access to a broker account, you have no way of knowing if it's truth or complete fiction. 3. Their claimed office is in Panama. This does not inspire confidence. 4. They refuse to show their licenses unless you invest at least $1000. It costs nothing to list licenses and registrations on a website. What legitimate company would only allow people who have invested 20 times the minimum investment to perform due diligence? 5. You get to see your gains/losses at the end of the day, and can't withdraw until the end of the period of your investment. Since you can't know that any real trading is happening, any results could be pure fiction. It would be sad if your account suffered a sudden, unfortunate loss if they find out you plan to withdraw. 6. I'm going to go out on a limb here and say that an average of 1.21% per day across many years is IMPOSSIBLE. If someone can give me investor access to a live account at a reputable broker that has achieved these results for all of 2009-2012 and continues to perform at those rates in 2013, I will happily apologise and humbly beg that person to manage all of my investments.
One day later, on May 1, the website went offline, and it has not yet returned since. According to Bloomberg, Mandal's entire $60,000 investment has probably disappeared forever.
According to Bloomberg Markets:
In hindsight, investors had reasons to question the service's legitimacy — a quick Google search for the website returns top hits like "scam," "legit," and "fake."
Here's what the site looked like in August 2013, obtained from a cached screenshot.
Secure Investments was linked to a fake address in Panama as well as invented offices in Hong Kong, Singapore, and London. Customers were asked to transfer funds to banks all over the world and were met with excuses when they attempted to withdraw the money.
The site said that those average gains of 1 percent daily couldn’t be compounded into an annual return. Even without compounding, those kinds of daily returns would amount to an annual gain of about 250 percent — or more than 25 times the average annual return of the Standard & Poor’s 500 Index, with dividends reinvested, for the past 50 years. Secure Investment didn’t provide that kind of context.
Rajibuddin Mandal, a doctor in England, told Bloomberg that he received an email from Secure on April 30: “Our Technical Department is currently working on system updates. Our company sincerely apologises for any temporary glitches that may occur.”
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