FSCA issues warning on Forex Breakout Kings

The Financial Sector Conduct Authority (FSCA) has warned the public to act with caution when dealing with Forex Breakout Kings (FBK) and its CEO Jerome Michaels.

“The FSCA has received information that FBK and Mr Michaels offer to trade in forex on behalf of members of the public,” says the FSCA warning.

“Without commenting on the business of FBK and/or Mr Michaels, the FSCA points out that entities offering to trade in financial products on behalf of South African citizens are required to be licensed by the FSCA.

“The FSCA wishes to inform the public that FBK and Mr Michaels are not authorised to given any financial advice or render any intermediary services in terms of the Financial Advisory and Intermediary Services [Fais] Act.”

An opportunity ‘like no other’

FBK’s website says it has more than 300 satisfied investors and R11 million capital invested. It also promises guaranteed capital return.

“FBK was born out of the pandemic, prior to Covid-19 trading played a role in our lives but we were still focused on our day to day jobs.

“Out of the pandemic bloomed an opportunity not only to enrich ourselves but to help others, an opportunity to change our livelihood,” says the FBK website.

“It was in Jan 2022 that FBK was born, with collaborations we introduced an investment opportunity like no other.”

Elsewhere the company explains what makes it different: “While there are many investment opportunities around, none offer the guarantee on return of your initial capital.

“As an investor you are trading risk free as capital is guaranteed.”

Most capital guarantee investments are heavily exposed to conservative assets such as bonds, not highly volatile forex markets.

The website also advertises returns of up to 7% a week, with referral bonuses of 5% on new clients introduced.

Experienced traders point out that making 7% a week is not uncommon, but few make it consistently.

“Guaranteed returns are a giveaway scam,” writes one commentator in this MyBroadband thread on FBK. “Yes I can and have made more than that in a day. But that’s ultra-high risk.”

The website offers no insights into the trading or risk mitigation strategies being pursued.

“Our goal is to secure capital as well as generate capital for back up reserves to enable us to risk more, which in turn produce a group of happy investors.

“FBK is focused on long term business strategies and we’re here to stay and conduct business for generations to come. The only way to ensure our long-term focus, is to be cautious and trade moderately in a dangerous market,” says the FBK website.

The FSCA advises the public to “always ensure that an entity or individual is suitably authorised by the FSCA to provide the specific financial product or service being offered”.

They can go here to see whether a financial institution is an authorised Financial Services Provider (FSP) in terms of the Fais Act.