Recently, TradingSchools.Org published an article regarding Colmex Pro and Trade Net. How each company is owned by the same person: Meir Barak. And how something is definitely ‘fishy.’
In a nutshell, Trade Net is a trading educational company that can supposedly teach a person to make massive profits by learning the trading secrets of the founder, Meir Barak.
Meir is supposedly so confident that he can teach you ‘how to get rich’ at day trading, that he wants to give you free money to trade. But first, you must pay him $500 to $50,000 to learn his innermost day trading secrets.
Once you have paid Meir Barak his fee, he then converts these educational fees into a supposed live trading account at a CFD broker named Colmex Pro.
Meir Barak owns Colmex Pro.
Colmex Pro: It’s just a video game.
Colmex Pro is a CFD, or Contracts For Difference stockbroker, located on an island far, far away from any sort of reputable regulatory authority. CFD’s are also highly illegal financial instruments in the United States.
CFD’s or Contracts For Difference are nothing more than tiny promissory notes between two parties. If party A wins its wager, then party B must lose its wage. It is always a binary outcome: one must win and one must lose. Meir Barak owns Colmex Pro. He takes the opposite of every wager that traders place on the Colmex Pro trading platform. When a trader loses a trade at Colmex pro, then Meir Barak is the winner.
There is no other possible outcome. This is a fact.
CFD’s have no financial backing whatsoever. They are just simulated financial instruments between two parties.
When you buy or sell a CFD, you are essentially playing a video game. An online video game. Where the payouts rely upon the whims and fancies of the designer of the video game.
Video games are meant to be addictive. They all start off easy and then become progressively more difficult. It is within this progressive difficulty that an addiction is formed.
Anyone that plays video games knows how addicting and time-wasting these games can be.
Colmex Pro is essentially a provider of financial video games. But these games are camouflaged as legitimate stock trading transactions. They are not. They are nothing of the sort.
Colmex Pro, as a business, must rely upon the continued losses of their patrons.
Trade Net, as a business, will supposedly teach you the secrets of successful trading at Colmex Pro. Both cannot be true.
Contracts for Difference are Illegal
In the United States, CFD’s or Contracts for Difference are illegal. There are multitudes of reasons why, and I will furnish those reason later in this article.
So, if CFD’s are illegal in the United States, how does Colmex Pro operate within the borders, and on the playing field of the worlds most reputable financial markets…the United States?
They have constructed a clever loophole.
Trade Net Educational Products: Its just a loophole
The United States stock market is a highly regulated ecosystem. It is the gold standard of investor safety. No other country on the planet provides such robust consumer protections as the Securities and Exchange Commission and the Commodity Futures Trading Commission.
In addition, all transactions that occur within this tightly integrated ecosystem are also protected with financial insurance provided by FINRA or Financial Industry Regulatory Authority. Basically, if your money is stolen, then FINRA will reimburse your losses.
This is why the United States capital markets are a safe haven for a world rife with despots, crooks, dictators, and financial scoundrels of every stripe. If your money is invested in US, its pretty darn safe.
Trade Net and Colmex Pro have devised a scheme in which to interact within this safe and secure financial system. They have created a ‘backdoor’ and are actively exploiting a loophole in our legal system which is currently giving them access to US based investors.
Their operation within the implied credibility of the United States based financial system is essentially a great big “FUCK YOU” to the regulatory authorities.
Conversion: You give us American dollars, we give you free magical money.
So how does the scheme work? Its really simple.
Trade Net is a trading educational provider. There are hardly any regulations regarding what a trading educator can, or cannot do.
Trade Net solicits investor accounts through a network of affiliate marketers, social media, and boiler room sales operations.
Investor A purchases a ‘trading educational package’ priced from $500 to $50,000 per person, through Trade Net. These monies are then immediately converted into a CFD trading account at Colmex Pro.
And just like that…they have circumvented all regulatory restrictions for all United States based operations.
It looks and feels completely legitimate. It has the veneer of legitimacy. It has the fancy looking website and a trading platform similar to US-based operators. But once you peel away the thin veneer, you find something completely illegitimate.
Why would anyone do this to themselves?
So, why would an investor willingly hand their money to a company with zero legitimacy?
1) They believe that the owner of the company is going to teach them the precious secrets to financial prosperity. Which simply cannot be true, because the owner of the educational company (Trade Net) also owns the brokerage (Colmex Pro). And the brokerage cannot be profitable unless the traders lose their money.
2) The CFD broker gives the victim outrageous amounts of leverage, in comparison to US-based brokerages.
Example: Legitimate brokerages that operate within the regulatory framework can usually only offer 2:1 leverage for stock trading transactions. For every dollar deposited, the investor can leverage up two dollars. For small stock trading accounts, it simply is not enough.
However, the CFD broker is not bound to any such regulations. Colmex Pro offers 20:1 leverage. Which gives the desperate, small account investor a mirage of liquidity. A mirage of opportunity.
Notice how I use the word ‘Mirage.’ That’s because it is only a mirage. It is not a real thing. It is just an imaginary blip within a video game trading platform.
I will repeat this…Colmex Pro CFD trading is not real money trading. The 20:1 supposed leverage is not real, there is no legitimately attached financial backing.
But when people are desperate, or they are greedy, they tend to do stupid things. Like hand your money over to a play money video game operator.
Can you trust a CFD video game?
You cannot. The very genesis of a CFD brokerage is to encourage the players to lose money. Colmex Pro is no different. Their very survival depends upon the participants to lose all of their money.
Example: Colmex Pro/Trade Net offers a 20% sales commission for affiliates to encourage the unwitting to willingly hand over their money. Additionally, Colmex Pro/Trade Net also encourages purchasers to use a credit card. And the credit card companies typically charge 1.5% to 3% to process these transactions.
Think about this a moment. Trade Net/Colmex Pro are willing to pay an upfront fee of over 20% sales commissions to unscrupulous internet promotors. Colmex Pro/Trade Net is so confident in their ability to drain the account of the victim, that they are actually willing to take an upfront loss of +20% for the opportunity to drain the remaining 80%.
Colmex Pro/Trade Net also operates a massive boiler room, where aggressive salespeople are also paid commissions to contact customers to ‘upsell’ additional education products, that convert into Colmex Pro CFD ‘video game money.’ And according to our sources, many of these boiler room salespersons came directly from the outrageously fraudulent binary options industry.
God only knows what commissions these boiler room salespersons are earning, on top of the 20% they are already paying out to affiliate promotors.
Remember: Colmex Pro and Trade Net are owned by the same person: Meir Barak.
Start your own stock brokerage!
After I published the previous article regarding Trade Net and Colmex Pro, I began to receive a deluge of private emails from users. The biggest question was,
“How do I start an offshore stock brokerage offering CFD’s?”
“This looks like the perfect scam. Why didn’t I think of this?”
Great questions! I am going to now give you the blueprint on how to start your very own TradeNet/Colmex Pro! And for me, this is easy. As a former high priest in the Temple Of Fraud, I understand these sorts of things.
Step 1) The first thing you need to do is throw up a website offering live day trading educational services. Promise the sun, moon, stars, and massive profits. Basically, herd as many sheeple into your FREE live trading room as possible:
Include tons of images with bikini babes, rented sports cars, gold watches, a yacht, and perhaps even your very own spaceship (Anton Kreil). And don’t forget to include bottles of champagne and unlimited shrimp cocktail.
Oh, and most importantly, proclaim to the entire world your amazing winning trades!
Don’t forget to hire a bunch of stooge affiliate marketers! Because this provides an additional layer of ‘social proof’ that everyone is getting rich.
Toss in a few “educational” trading packages, which of course, will be converted into Colmex Pro CFD trading accounts.
Now, all you need is to throw together your very own Contracts For Difference (CFD) stock brokerage.
Thankfully, this is the easiest part of all.
Start your own Contracts For Difference Stock Brokerage in only 72 hours!
This is the crazy part. I stated in the above header, “Start Your Own CFD Brokerage in 72 hours!” Yep, anyone can do it.
And the best part? You can do this with ZERO MONEY DOWN.
Don’t believe me? Well, any of the following companies will gladly set up your very own CFD Brokerage in just a few clicks of the mouse. And with NO MONEY DOWN. Begin accepting deposits as quickly as you can lie and bullshit people into trusting you.
Wow, so many companies in which to choose!
But, you would think that these companies would make plenty of effort to weed out anyone looking to scam and rip off consumers. Right?
Wrong. In fact, its about the shadiest environment I have ever witnessed.
Example: with several of these companies, the only requirement was that I send over a government-issued ID card. Wow, anyone can provide a government-issued identification card. And so, to have a little fun, and convey to my audience just how ridiculous this situation, I sent over the following government-issued identification card.
To my shock and utter amazement, the Federal Prison ID card didn’t create much of a hub-bub. I thought to myself…who would be crazy enough to let me open a stock brokerage?
Additionally, a simple background check through FINRA reveals all of my past misdeeds. It’s not hard to find. Apparently, none of this is a disqualifying factor to many of these “white label” providers.
It seems, the only thing of interest was the size of my internet audience, whether I had a large social media following, and if I had an advertising budget for Facebook advertising.
Granular Control of the CFD Trading Platform
After you are approved for your very own CFD brokerage, you will then be given back office control to manipulate various aspects of your trading platform.
I had a lot of questions that needed to be answered, which included:
- How can I loosen or widen the spreads for individual traders?
- Can I add or subtract volatility in the pricing of securities, beyond the official NYSE data feed?
- What sort of roadblocks can I employ that make it more, or less difficult for traders to profit?
- Can I create CFD simulators where people trading simulated accounts can profit easily? And those with live accounts will not profit as easily?
- Can I add or subtract trades to give the impression that certain accounts are highly profitable–without actually taking any trades?
- Can I process deposits into non-traceable bank accounts?
- Can my CFD brokerage have a non-traceable server address to avoid United States regulators?
1. Yes, with only a mouse click, the CFD brokerage software can add or widen spreads to batches of securities. Or, if any trader reaches a certain profitable threshold or is too successful, then mechanisms can be deployed to ‘favor the house’ and decrease trader profitability.
2. Yes, suppose a trader uses limit orders to enter trades. Volatility can be decreased so that virtually none of these limit orders will be filled. The trader will then be forced into trading at the more expensive ‘Market’ price.
3. Yes, measured and metered volatility can be added to any individually assigned trader. This results in a higher number of resting stops being filled for losses.
4. Yes. Like a casino, the ‘FREE PLAY’ slot machines can be rigged for easy payouts. Once a trading account is funded with real money, the regime switches from ‘FREE PLAY’ mode to ‘THE HOUSE ALWAYS WINS’ mode. The customer never ‘feels or sees’ the subtle transition.
5. Yes. Since you control the account ledgers, you can create custom accounts used for ‘marketing purposes.’
6. Yes. A third party company processes Paypal and credit card deposits and then converts deposits into virtual currency, which are then forwarded to a non-traceable wallet address.
7. Yes. All web traffic can be routed through VPN’s or Virtual Private Networks to confuse the exact location of the CFD brokerage.
Many readers are probably shocked by some of these answers. Truth be told, I was shocked myself.
But the simple truth is that when I started this journey of discovery, regarding the CFD industry, I simply did not know what questions needed to be asked.
Thankfully, the helpful folks at the CFTC or Commodities Futures Trading Commission provided me with a list in which to start and explore.
Most importantly, they gave me direct examples of how most CFD and offshore Forex brokerages routinely scam their customers. It is their hope that consumers seriously consider doing business with many of these companies. That consumers consider how many of the schemes that are deployed to drain the accounts of the customers are very subtle and hard to detect.
For these reasons, it should now become more apparent why CFD’s or Contracts For Difference are highly illegal products in the United States. Because it’s too easy to cheat and steal.
Wrapping things up
I am sure that this article is going to offend many people. In particular, anyone that regularly trades CFD’s. Or, countries that from which many of these CFD brokerages freely operate.
Many folks will scream and cry, “but these brokerages are regulated by CySEC, Israel Securities Authority, Australian Regulation Authority, South African Financial Services Board, The Sovereign Government of Lichtenstein, or The Pasha Of Punjab Province!
In future articles, we will address these very issues. For instance, suppose that you have a CFD account from a brokerage located in South Africa, and your money has now mysteriously disappeared? Or, you feel that your CFD trades were manipulated and you would like to register a complaint with the Israel Securities Authority? What is the process of filing a complaint? And do these supposed “regulatory authorities” even respond to complaints?
Is future articles, we will be exploring many real-world examples and filing actual complaints in hopes of sparking an investigation. We will see whom actually cares about consumers? And whom is just paying ‘lip service?’ Hint: you are not going to like what I find.
Thanks for reading. This was yet another crazy long article. If you made it this far…you are a champ! And don’t forget to leave a comment below. I especially want to hear dissenting opinions.