Brokers who are no longer with us
Stability in global financial markets, as well as macroeconomic stability in most post-Soviet countries, are providing a huge boost to business development.
Every month, more and more new companies enter the financial brokerage services market, and leading brokers are constantly improving their trading conditions.
However, the quiet and calm atmosphere in the brokerage industry only reduces traders' vigilance, leading to newcomers depositing their funds into companies without any doubt about their solvency.
In this article, we wanted to remind you of the biggest broker bankruptcies that occurred just a few years ago, so you can avoid making the same mistakes that happened to thousands of traders recently.
2014 and 2015 were particularly significant years for all Forex traders and left a huge imprint on their hearts.
It was during this period, when the ruble and hryvnia began their rapid decline, that numerous fraudulent companies simply pulled the plug, dealing a huge blow to the reputation of the entire forex industry.
Lack of regulation, a lack of a safety net for unforeseen situations, and outright theft—all of this came to light overnight and spilled out into the open, leading to multi-million dollar losses in traders' deposits across the post-Soviet space.
Therefore, we invite you to recall the top five leaders who have denigrated the Forex industry, as well as a brief chronology of developments around each of the brokerage companies.
1) RVD Markets
RVD Markets was a mid-range brokerage that was highly sought after by new traders because it offered a no-deposit bonus for participating in forums.
A plethora of stocks and favorable trading conditions—everything pointed to further growth and development. However, in 2014, the Swiss authorities decided to unpeg the Swiss franc from the euro, and in a matter of seconds, the charts plummeted two thousand points.
The company simply failed to forcibly close traders' trades in time, and many of them went into negative territory. Thus, the unexpected market surge resulted in multi-million dollar losses for the company, which was placing leveraged trades on the interbank market.
Ultimately, a company representative filed for bankruptcy, but most of the traders' deposits were sent to the traders, without taking into account the profits, of course.
2) Pantheon Finance
Pantheon was one of the largest platforms connecting traders and investors, and its PAMM system was one of the best among many brokers.
However, problems at the company began after one of the senior managers, actively responsible for client deposits, became interested in binary options trading.
Hoping to win back, he used the company's clients' money, but when he fell into the hands of scammers, he himself was deceived.
To cover his tracks, he and his team corrupted client databases, which resulted in traders being unable to access their personal accounts, and some time later, the company declared bankruptcy.
It later turned out that their PAMM system was nothing more than a front, and the organization itself operated on a pyramid scheme.
3) Forex Trend
Forex Trend had a very close relationship with Pantheon Finance, as they provided their PAMM platform and technical support.
However, the Pantheon bombing dealt a severe blow to Forex Trend, resulting in a massive outflow of clients and deposits from the company. Most interestingly, Forex Trend created a fictitious manager rating system and, like Pantheon, built a pyramid structure.
When panic set in, there simply wasn't enough money to support the pyramid, so they simply shut down and disappeared with millions of clients' funds.
However, the largest clients were a bit lucky, as some brokers, riding the wave of the crash, allowed deposits to be restored as bonuses if they were replenished with the same amount lost in Forex Trend.
4) MMSIS
MMSIS ran one of the most aggressive advertising campaigns, with calls to invest in their index and the top twenty managers appearing even on the largest television channels in Ukraine and Russia.
The first warning sign that investors were aware of the pyramid scheme was WebMoney's refusal to cooperate with the company, as well as the freezing of accounts.
However, clients ignored this event, and following numerous complaints, MMSIS accounts with the "Money Online" service were closed.
Ultimately, the company did not withdraw clients' funds for several months, while cynically continuing to advertise and attract new clients.
When it became clear to everyone that the company was fraudulent, the CEO contacted the company and declared bankruptcy. Along with MMSIS, the brokerage firm Mil Trade, which had recently been acquired by MMSIS, also closed down that same day.
In conclusion, I would like to note that the listed companies were considered industry leaders and had an extremely positive reputation.
However, the only thing that united them in a chain and was the harbinger of their scam was overly aggressive advertising on all websites and media.
