(News Bulletin 247) – The Financial Markets Authority warns the public about fraudulent investment offers through trading robots. They particularly target the DOM-TOMs.

To protect savers, the Autorité des marchés financiers (AMF) regularly warns them of the risks associated with certain investments.

Last month, it issued a new warning against dilutive financing transactions, which can be very expensive for shareholders. This time, the financial market policeman warned the public about automated trading offers on the Forex market, the foreign exchange market.

Trading robots or Expert Advisors (which are perfectly legitimate tools in themselves) carry out operations without human intervention. Savings are no longer entrusted to a financial adviser but to an algorithm, which acts according to the parameters entered (price, time of execution, etc.).

Numerous reports of savers

Over the past ten years, the offer of automatic trading on the stock markets, currencies and more recently on cryptocurrencies has exploded. In the press release published Thursday, the AMF warns of fraudulent automated trading offers on Forex, offered by companies not authorized to offer investment services in France.

In recent months, the stock market regulator has measured the extent of the phenomenon. It has received numerous reports from savers and overseas institutions concerning this type of investment. These fraudulent offers are also based on sponsorship programs and particularly target overseas departments and territories. They are relayed in videos on social networks and presented during promotional conferences, in rooms rented for the event, or via closed messaging groups.

In recent months, the AMF has called for vigilance on investment offers on social networks. Several influencers have promoted more or less dubious financial products, according to a formidable modus operandi, especially to a very young population with no financial background.

Unrealistic rates of return

According to the AMF, several offers with very similar arguments promise unrealistic rates of return of “5% to 15% per month”, “up to 400% per year” obtained thanks to an “automatic trading robot” which requires the subscription of a license, monthly or annual, which can reach several hundreds or thousands of euros.

Investors, seduced by the lure of easy gain, are invited to open an account with a broker designated as an exclusive partner, not authorized to offer this type of service to a French public, deposits and withdrawals being made only in crypto-assets, explains the AMF.

“Rather than withdrawing their potential earnings too early, under penalty of fees, savers are encouraged to generate affiliate income, by recruiting new subscribers, in the form of bonuses or commissions of different levels”, explains the financial policeman .

The mode of operation is similar to multi-level marketing (MLM) structures, the aggressive practices of which the AMF had denounced in the sale of trading training packs in June 2020. To fool an audience seduced by these tempting rates of return , the keywords used, such as financial freedom Or passive income“are also the same”, deplores the financial policeman.

The AMF reminds that only companies approved as investment services providers in Europe are authorized to offer brokerage services such as trading, automated or not, on Forex. The regulator has taken several actions to put an end to the actions of these unauthorized companies.

In general, the AMF reminds the public of the vigilance rules before any investment. Savers are advised to beware of “unrealistic promises from trading sites guaranteeing quick wins”, as well as to check that the company is indeed authorized to offer financial services and that it does not appear on one of the blacklists of the ‘AMF.