Gardaí condemn influencers acting as Forex traders as investigation launched 2 months ago

Gardaí condemn influencers acting as Forex traders as investigation launched

"These influencers usually have a limited understanding of the Forex trading market."

Gardaí have condemned social media influencers acting as foreign exchange traders as an investigation is launched into the trend.

Detectives from the Garda National Economic Crime Bureau and Tallaght Garda Station today conducted searches of two premises in relation to an ongoing investigation into breaches of Regulations under the Markets in Financial Instruments Directive (MiFID) 2017.

The investigation is being conducted with the support of the Central Bank.

Mobile phones and documentation were seized during the searches. No arrests have been made at this stage of the investigation.

Gardaí said that the investigation relates to an entity that uses social media platforms such as Instagram and Facebook to promote and advise persons to invest in Forex trading, promising easy and high returns.

This entity is not authorised by the Central Bank.

The promoter or influencers use social media platforms to make trading recommendations, called signals, to individuals as to when to buy or sell financial instruments, such as currency, using Forex traders.

Gardaí said that these influencers usually have a "limited understanding of the Forex trading market".

According to Gardaí, the Forex influencers follow a method such as outlined below:

  • The companies or entities promoting investing in Forex trading do not have offices, are not authorised by the Central Bank of Ireland or other authority and their existence is as a website or social media account.
  • The influencers promote their success in Forex trading by showing images of themselves on social media living the high life; with expensive cars, high end shopping and holidays.
  • Associated accounts will describe how they have made easy money on the advice of the promoters.
  • The victim follows the promoters or the social medial account of the trading entity on Instagram or Facebook account that is promoting Forex trading and promising high returns on small investments (usually no less than €400).
  • The victim is contacted and invited to link with a trader who will provide the victim with access to trading signals which purport to provide a recommendation for the best time to buy or sell a currency pair in order for the victim to make a profit.
  • The victim sends money to the trader who sets up an account and provides advice on trading.
  • The promoter will promote further investment if the initial investment fails.

Major warning signs are no list of a physical address/registered company address or contact telephone number, if communication tends to be solely through online methods, or if the firm is not authorised by the central bank.

Individuals and firms that offer investment advice in certain Forex trading require authorisation by the Central Bank or other regulatory bodies if based outside Ireland.

If you have any concerns that a firm is not genuine or is not authorised you can make a report to your local Garda station and/or to the Central Bank either through its website or by phoning +353 (0)1 224 4000.

Gardaí said: "Remember, if you are offered something that seems too good to be true, it probably is too good to be true and is most likely a scam."