On May 30, TradingSchools.Org published a story titled: StockTwits: The Facebook Of Fraud.
In that story, we detailed how Stock Twits is a social media and investment platform that is essentially enabling and providing a venue for fraudulent trading products and services. Nearly every single month, a horror story appears in our inbox, related to StockTwits.
The stories are remarkably similar. That an unwitting investor found a money manager or supposed hedge fund product that promised huge profits with little risk.
Within a few months, the money manager disappears with the investment. The victim is left with only faked or fraudulently produced brokerage statements.
During just the month of May 2017, the FBI made three separate arrests, of three different “financial advisors” that ripped off investors for a combined $12,000,000. All three of the frauds originated from, and were frequent advertisers on the StockTwits platform.
It has been only 22 days since our last article. And yet another fraudulent investment advisor has been busted by the CFTC and the FBI.
Global FX Club
According to the CFTC, Global FX Club ripped off investors for about $400,000.
Simultaneously, several user profiles were created on StockTwits. These user profiles were used to stream out a near constant barrage of supposedly winning Forex trades. These can be viewed here:
The fraud was further enhanced and enabled directly by StockTwits as they sold advertisements that guaranteed a minimum of Stock Twits users would unwittingly be directed to Global FX Club.
Once the victim arrived at the Global FX Club website, and with the implied credibility of StockTwits, the client was then offered the opportunity to invest.
The owner of the company, Michael Wright would proclaim his Forex trading greatness, and offer his trading services as a managed service. Michael Wright would tempt the victim with a performance-based scheme. For every dollar earned, the supposed money manager would receive 15% of the monthly profits, only after a return of 100% had been achieved.
Fraudulent Account Statements
As the months progressed, Michael Wright would mail account statements to each victim. Every single month, he proclaimed amazing profits.
Sometime in the fall of 2016, Michael Wright simply disappeared. Customers began complaining to the CFTC and forwarded the supposedly authentic account statements to the CFTC and the FBI.
The CFTC examined the account statements and discovered that all of the statements were fraudulently produced.
Investigators were able to track down several Forex accounts controlled by Michael Wright. They discovered that during the time of the fraud, a total of $115,800 was deposited in several Forex trading accounts. Of this amount, Michael Wright lost approximately $114,300.
Investigators for the CFTC and the FBI began to dig even deeper. They discovered that Mr. Wright had been using the remainder of investor funds to support his “Forex Trading Lifestyle.”
Money was spent on cars, food, jewelry, topless bars, entertainment, and expensive clothing.
In total, investors believed that their investments had grown to about $5,000,000 in profits. In reality, investors were left with nothing. And supported the lifestyle of a con artist.
Thanks for reading.