The Commodity Futures Trading Commission (CFTC) is the federal government agency that regulates the commodity futures, commodity options, and swaps trading markets. There has been a sharp rise in trading fraud in recent years. Much of the fraud involves foreign currency trading, precious metals, and commodity pools. Following is information about these offers and simple ways to spot the ones that could be scams.
There are several signs of possible fraudulent sales pitch:
- Leading you to believe you can profit from current news already known to the public.
- Made through word of mouth referrals or emails from friends and relatives, members of community organizations, churches, or social groups.
- Contacting you asking for personal information such as your name, phone number, email or home address.
- Claiming to know unique market trends or to have a record of highly profitable trading.
- Promising quick, large and guaranteed returns.
- Requesting cash immediately.
- Advertised on radio, television, or online.
Before trading in the commodities markets, ask, ask, and ask some more!
- Contact the National Futures Association to check the person or company’s registration status, business background, and disciplinary history.
- Ask how the financial professional is qualified to provide you with the product or service.
- Ask how the product meets your financial needs.
- Ask how the financial professional is paid for his/her service.
- Ask about all fees and commissions charged by the commodity pool operator.
- Ask for the advice of an independent and licensed financial advisor or consultant whom you trust.
- Ask for all information in writing. Do not rely on oral promises or statements.
- Ask anyone not willing to comply why they are hesitant to do so.
If you have questions, are aware of suspicious activities, or believe you have been defrauded in the commodity futures, commodity options, or swaps markets, please contact the CFTC immediately at www.cftc.gov/TipOrComplaint.
For more information about how to protect yourself against commodities fraud, please visit www.cftc.gov/consumerprotection.