Another Eurextrade?

Here we go again. Here comes another company offering us the chance to become fabulously wealthy. Will it be another Ponzi scheme like Eurextrade? Is it yet another scam?

You can be the judge.

A reader contacted us asking for advice about an email he had received from a company called Leveltrade. He said they’d told him that they would provide him:

“with guidance and knowledge to profit from forex markets. In order to begin to trade one has to open an account for $100. I just signed up out of curiosity to learn. The company called me from their UK based office and I spoke to their consultant who advised me on how to trade and that I should deposit $50 in order to begin.”

He wasn’t convinced. He said:

“I am a bit skeptical about online business especially ones like Eurextrade which disappeared after making millions from naive consumers. I am asking your advice on the matter. Is this business legit? Is it worth putting up your money in because it looks very tempting?”

It was certainly worth a look.

Leveltrade have a respectable looking web site but that’s not proof of anything. Plenty of fake universities, investment schemes and scams of all sorts have good-looking web sites. There’s no simple relationship between the quality of a web site and the respectability of a company. However it did provide some clues to what they claim to do. Their web site says that their “goal is to prove that everyone can succeed on the Forex Market” and that they “provide most qualified market analyses to our customers, as well as the support of our highly experienced consultants and individually tailored trading conditions."

I’m suspicious. Very suspicious.

Let’s start with the claims they make about how much money you can earn from your “investment” with them. Their web site offers an online chat facility and, using an assumed name, I asked them a few questions. “What sort of profits do you think I could make?”, I asked. “If you start with 500usd, between 100 to 150usd a day”, I was told. I then asked, “So if I invested $1,000 today how much will I make?” Their answer was jaw dropping “potentially 2000usd”.

Remember that the crooks at Eurextrade only ever promised “up to 2.9%” per day. These guys at Leveltrade are promising anything up to 200% in a day.

Let’s face facts. That’s simply not possible. It never has been and it never will be. Ask yourself this: if these returns really were possible why aren’t banks, investment companies, pension schemes and bankrupt European governments investing in them? The reason they’re not is because they’re impossible, that’s why. They’re impossible for serious, highly experienced investors and even more impossible for mere mortals like you and me.

There are some more mundane facts about Leveltrade that should ring alarm bells.

A good start when investigating any company is to look at their address. Leveltrade give contact phone numbers in both Russia and the UK but give just one physical address for both: "Office 3 Unit R1 Penfold Trading Estate Watford, UK WD24 4YY".

It took no more than a few seconds on Google Maps to establish that far from being a fancy office in the financial district of a city the address is in fact in an industrial estate outside London. What’s more it’s the exactly the same address that’s given by a number of other companies. The reason is simple. It’s no more than an accommodation address used by companies who want to give the impression of having an office but who in fact have nothing of the sort.

Then there’s the UK company itself. During my online chat with them I asked how long the company had existed in the UK. “4 years”, I was told.

However Companies House, the UK’s registrar of companies tells a different story. The record for Leveltrade makes it clear when their company was incorporated. Not “4 years” ago. Not even 4 months ago. Leveltrade was established as a company in the UK just over 3 weeks ago on 15th May 2014.

What’s more they don’t appear to be registered with the UK’s Financial Services Authority, the regulator of such organizations.

Leveltrade also claim to be headquartered in St Vincent and the Grenadines, a small island state in the Caribbean that allows you to form a company without publishing the identities of the directors or shareholders. Leveltrade’s registration there is similar to that in the UK. Their address is shared with a number of other Forex trading companies, some with a rather shady past.

There’s also their approach to recruiting “investors”. The reader who first contacted us about them told me that they’d been pestering him since he first contacted them and I had the same experience. In the 30 minutes after I ended my online chat with them they tried to call me six times and several times more over the next couple of days. One similarity the certainly have to Eurextrade is that they offer incentives to “investors” to recruit other people. If you “refer a friend” they offer you a “20% bonus” and they’re also seeking local representatives around the world.

Leveltrade promise unbelievable returns, they’re either deceptive or secretive about who and what they are, they desperately try to recruit people and they don’t seem to be registered with any regulators in the countries in which they claim to operate.

I don’t think that Leveltrade is another Eurextrade. Not exactly. There’s no evidence that it’s a Ponzi scheme but they already have a history of deception and I certainly wouldn’t trust my money with them.

Neither should you.