Forex Trading Scams: Insider Trading Congress
By Crypto CoinsNews staff | January 30, 2018 04:23:39We have just discovered that there are people that are actively trading Forex with their clients, and we are not talking about insider trading here.
However, the same thing is happening with other cryptocurrencies.
In this article, we will look at what we know about insider trade fraud and why the police is not doing enough to stop it.
First, what is insider trading?
The term ‘insider trade’ is often used to describe fraud that involves trading a product or service with a customer for a profit, or a ‘bid’ for a product, without disclosing to the customer.
In a typical insider trading scam, a trader buys shares of a company for a specific price (say $1,000), then sells them for the same price, with the expectation of making a profit on the transaction.
A person who does this may then invest in the company and make a profit for himself.
The company’s stock price will rise, but its profit margin will decrease over time.
The scammer then sells the shares to the stockholder who buys them from the scammer, and then sells those shares to another company for the price he was expecting to make.
In this scenario, the scammers profit is lost on the investor, as he now has to pay out more money to the scamming company.
The person who bought the shares at the inflated price will then receive an ‘insurance payout’ of around $1.25.
This payout is supposed to cover any losses caused by the scam.
However if the scam is discovered, it will cost the scam artist a significant sum of money.
The government has been aware of insider trading scams since at least 2014.
The authorities have already started a campaign to curb the practice, but the scheme has not stopped yet.
Investor Protection Agency (IPA) head John Prakash said the scam has been on the rise and has been going on for years.
He said that this is due to the fact that there is no regulatory framework for insider trading.
He explained that the Securities and Exchange Board of India (SEBI) is currently reviewing its own regulatory framework on insider trading to ensure that the scamsters do not gain a competitive advantage.
Prakash added that it was difficult to determine the exact number of scammers, but that the number was higher in the past.
He added that the industry had a number of rules and regulations that are meant to prevent the practice from taking place.
“However, in the last few years, the number of scams has increased.
There are multiple reasons for this.
Firstly, the regulatory framework has been more stringent in the Indian market and this is partly due to better enforcement by the government,” Prakas said.
In some cases, the scam involves a company that has invested in a company before its public debut.
This means that the company is still actively trading on the stock market, but there are no formal contracts that the investor has signed with the company.
In another scam, the company has bought shares of another company that is in the process of going public.
The investor is then offered shares of the new company, but he does not take them up as the stock price is still inflated.
The investor then buys the shares again and then puts them up for sale.
The scammer is then able to make a huge profit on a small investment, which has been done at a time when the share price of the company was dropping.
Investors often fall victim to insider trading when they invest in companies that are expected to go public.
According to the Securities Industry and Financial Markets Association (SIFMA), there are more than 500 such companies in India.
The SIFMA estimates that a typical scammer makes between $1 million and $3 million per year.
According to a 2014 report by the SIFAMA, there are several types of insider trade scams that are being uncovered by the law enforcement agencies.
The scams are also happening in other countries around the world.
The report points out that there were about 1,700 cases of insider trades reported in 2015, but only about 30 of these were convictions.
The remaining cases were either dismissed, or convictions were only for misdemeanours.
This means that fraudsters can still obtain huge profits from trading a stock without revealing the source of the funds.SIFAMA has launched a campaign called ‘Investors Beware’ to alert investors of the potential risks of buying into companies that have not yet gone public.
Investment advisor and senior executive at a global hedge fund company, Rajiv Suresh, said that it is the biggest challenge in the industry.
“There are many other scams going on and the risk of a scam is going to be high.
So, it is difficult for a professional investor to take on such risk,” he said.
The biggest hurdle for professional investors in this space is that the market is unregulated, and the scams are happening on a regular basis.