AUSTIN – The Texas State Securities Board is warning investors about unregistered online platforms defrauding the public through the sale of so-called “investment plans.” These investment plans often sound appealing – they tend to be tied to blockchain technology, artificial intelligence or foreign currency and promise guaranteed returns paid over very short terms. In many instances, however, the investment plans are simply a means to attract victims, take money and defraud the public.
Bad actors are using descriptive terms to market these investment plans – often referring to them as “silver” plans, “gold” plans or “platinum” plans. They tend to be advertising through social media and websites that serve as online platforms for depositing principal. The promoters generally tell potential clients that, upon receipt of principal, the firms will use the money to trade any number of different products – from stocks to forex, and from contracts for difference to cryptocurrencies. In any event, these promoters tend to have one thing in common: they fraudulently claim investors can reap risk-free guaranteed profits – as high as ten or twenty percent or more over a term often measured not in years or months but days and hours.
Securities Commissioner Travis J. Iles noted the “red flags” associated with these fraudulent promotions. “First, the parties are generally not registered to deal in securities,” he explained. “Many parties are not providing basic information – a real physical address for the office or the identities of corporate officers. Still, they’re offering sky-high returns over a very short term – with no risk whatsoever. All investments carry some degree of risk – and anyone telling you otherwise should not be entrusted with your hard-earned dollars.”
The Texas State Securities Board continues to bring enforcement actions to protect Texans from promoters of fraudulent investment plans. For example, earlier this year, Commissioner Iles entered an emergency order to stop DailyForex247 from continuing to advertise silver, gold and premium plans that fraudulently promised to pay up to $8,000 over five days. He entered a similar emergency action against Digitaly [sic] Invest and FxSmart-Robots, another against Delta Crypt Limited, and other enforcement cases – including a case that named James Blundell and nearly a dozen other parties offering various investment plans that could purportedly turn $1,000 into $15,000 after five days of trading. Blundell was promoting the investment plans through a broad social media presence, and he was even adding false legitimacy to the scheme by using a forged Texas driver license and a phony trading certificate.
Earlier this week, Commissioner Iles brought another emergency cease and desist order against promoters of fraudulent investment plans. This order named Affort Projects, the operator of numerous online platforms including AlgorAndTrade24, AuxiliaryFX Ltd., CryptoDailyTradePlus, CryptoStreamTrade, Exerlo, FXTradePlus24, FXVirwoxFair, Nexetral, PrimeCoinOption, SplitFxTrade, TradeFlow 24, TradeOptionMarket, ViaForexTrade, XpressTrade24 and XpressTrade247.
The emergency order found they were offering investments in investment plans, including the starter plan, premium plan and executive plan. The off-market products supposedly paid exorbitant returns – as much as 20 percent per week through high-frequency Bitcoin trading. Most returns were allegedly characterized as either risk-free or guaranteed.
According to the order, these investment plans were part of a scheme to defraud the public. In furtherance of the scheme, the respondents were not providing full, truthful information to potential clients – they were not, for example, identifying principals and key personnel or strategies for actually generating the exorbitant profits. The emergency order also accused the parties of deceiving potential investors through their claims of regulation by a forex regulator – and not disclosing Spanish officials already warned the public about a previous illegal offering.
“Scammers are recruiting victims by illegally advertising silver plans, and expert plans, and various other plans. These plans tend to have one thing in common – they’re fraudulent plans. If you deposit your money, you should expect to lose your money,” said Enforcement Director Joe Rotunda.
The Texas State Securities Board encourages investors to conduct thorough due diligence and investigate before they purchase an investment. Investors can obtain more information about protecting themselves from fraud at the agency’s website at www.ssb.texas.gov.