Financial fraud involving the promised purchase of gold, silver, coins and option trading is on the rise. This week, the Commodity Futures Trading Commission put up a web site which will help consumers from becoming victim to such fraud.
Using an online tool, consumers can use to check the registrations and disciplinary histories of brokers and other financial professionals.Most financial fraud is connected with unregistered financial professionals, Mr. Goelman said at a news conference.
The tool allows searches for brokers registered with the commission and the National Futures Association. It also enables searches of databases maintained by the Financial Industry Regulatory Authority, or Finra, a self-regulatory agency for brokers, as well as the federal Securities and Exchange Commission.
The website also has interactive videos to help consumers evaluate a risky or potentially fraudulent investment opportunity. Generally, any promises of absolute returns or “slam dunks” are too good to be true.
From 2010 to 2013, the commission took action on fraud schemes that affected about 30,000 people, with losses totaling $1 billion. Some people lost hundreds of thousands of dollars — in some cases, their life savings.
The Commission can and will take action on companies and individuals committing such fraud. For example, one commodity company persuaded retail investors to invest in precious metals like gold, silver and platinum. Investors did not realize that after they paid interest, commissions and fees, it was impossible for them to make any money.In addition, the company didn’t even buy any metals.
In May, the Federal District Court for the Southern District of Florida said the company and two related companies had defrauded thousands of retail customers and ordered them to pay more than $100 million in restitution and civil penalties.