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US Publicly Listed FX Software Firm Faces Scheme Allegations From European Clients
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US Publicly Listed FX Software Firm Faces Scheme Allegations From European Clients

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US Publicly Listed FX Software Firm Faces Scheme Allegations From European Clients

The regulatory considerations which must be taken into account by retail FX firms in the United States are so comprehensive and costly that the vast majority of companies which once operated in the land of the free have packed their bags and made for pastures new.

Indeed, whilst aiming to protect the retail customer from sustaining irretrievable losses following the financial crisis of 2008 and 2009, as well as the prevention of further instances of firm failures such as MF Global and Peregrine Financial Group, the nation’s regulators, in line with the majority of financial markets authorities around the world, do not cover those who promote and sell FX trading software, notably companies which seek to gain investments from retail customers for schemes associated with such software.

Publicly Traded Company Experiences Surge In Share Prices

During the course of last year, there were a number of schemes which enjoyed this legal loophole. One such example being OakFX, which was marketed toward senior citizens as a method of investing in an FX scheme, then allowing the OakFX system to automatically trade the accounts, claiming that “Phoenix Forex Ltd is dedicated to the passive and semi-passive lifestyle income generation of its clients.” This resulted in substantial customer losses, and a censuring from the New Zealand FMA.

Now, a company which operates in the United States under the name of Global Profit Technologies, bares some similarities to these schemes. Global Profit Technologies is publicly traded, and in conjunction with its website 4X-DAT (Join 4X-DAT), provides software which automatically trades customer accounts, and is publicly traded.

Whilst 4x-DAT’s functionality is very similar to other such trading software, in this particular case, the company which provides its trading system, Global Profit Technologies is a publicly listed corporation, with share prices trading at $0.55 as of today’s date.

With this in mind, the US government would certainly be aware of the company’s existence, and its founder and CEO, Joseph Nemeth’s history. Mr. Nemeth founded 4x-DAT and 4X-MM in his native Czech Republic, and recently arrived in Arizona following a series of internet-based vitriol levelled at the scheme, claiming that it has relieved allegedly unsuspecting customers of approximately $10 million, with a special website being set up by some of those affected in order to bring this to light.

Criminal Complaint Led to Paper Trail

Whilst, according to the website representing Nemeth’s alleged victims, a criminal complaint was made against Mr. Nemeth and his company at The Home Office of the Slovak Republic and passed to the District prosecutor in Trnava and the district Police station in Trnava, a share holder also demanded help from The Ombudsman Office in Bratislava.

Despite this, no action was taken and police in Trnava informed the shareholders that investigations into the actions of Mr. Nemeth had been running for a long period and that an official in the United States had informed them that Mr. Nemeth had a Canadian nationality, which made any legal action impossible.

Sales Representative Speaks Out

Today, to further investigate the method by which customers are acquired by Global Profit Technologies, Forex Magnates spoke to one of the company’s representatives, who is a self-employed FX trader based in Canada, serving the Chinese market.

Himself a trader of significant experience, this particular representative believed strongly in the product, yet had performed no background checks nor investigated the allegations laid against the firm.

“I was approached by a US public company since they know me as one of the good traders,” he explained.

“This is a revolutionary FX trading software developed over 8.5 years with hundreds of millions of dollars, this kind of software was only available for huge institutions, now it is available for retail traders.”

Despite this substantial claim, the representative was unable to identify the institutions in question, nor was he able to provide documentation to substantiate the development costs.

With regard to the return on investment, the representative explained that, “I have been tracking its performance with live accounts for over a year now, and the return since 2012 was 4% -12% per month.”

“This is a software company, and the developer was a trader over a period of 10 years,” claimed the representative, yet Mr. Nemeth’s LinkedIn profile contains no data whatsoever, and there is no trading history available for Mr. Nemeth. Upon viewing a seminar held in March 2013 which is publicly available on YouTube, Mr. Nemeth waxes lyrical in what can only be described as colourful language about the lack of trading prowess of his audience for over one and a half hours, yet does not demonstrate the software, and makes claims that, “Good traders do not give their secrets away.”

The Hard Sell

The representative went on to explain to Forex Magnates that he “bought the software for $5,000,” and that he has now been enlisted to sell it, with a wholesale price of $2,995.

When asked if the rationale behind this is to sell software to novice traders, then take IB commissions from a broker which Global Profit Technologies has a relationship with, and then take the b-book commission based on client loss, the representative said “No, the company is not an IB,” despite broker logos being displayed on the company’s website, and that the representative confirmed that, “Right now, there is only one broker, MB Trading.”

When confronted as to the possible dubious nature of the product, and challenged regarding the investigations undertaken by the Czech government, the representative stated, “Yes, there was some negative news on the internet, but I know the real story.

His previous investors were annoyed because it took him 4 years longer to deliver this software and to cut a long story short, nothing is easy, he had to make sure this thing works and it is real.”

With the representative still unconvinced of potential pitfalls, the conversation drew to a close, however, with the HYIP perpetrators not only refusing to give up but indeed basking in public attention from an often unsuspecting audience, it could be only a matter of time before the United States’ national regulators require licensing of FX trainers and software providers.

A letter released by the company in December 2013, which was provided to the representative when questions relating to the adverse publicity were raised, denies all allegations regarding a scheme.

US Publicly Listed FX Software Firm Faces Scheme Allegations From European Clients | Forex Magnates

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