FMA issues Phoenix Forex warning

The Financial Markets Authority is warning the public about an Auckland firm which it understands makes investors pay an up front fee of over $25,000 to access a foreign exchange trading system.

The authority believes Phoenix Forex, which has a registered address in central Auckland, is making untrue claims about the level of returns it offers investors.

"FMA believes... that Phoenix Forex is misrepresenting the profitability of, and risks associated with, its trading system. Investments promising unusually high returns are often not legitimate offers. FMA urges caution by anyone considering dealing with Phoenix Forex," the warning said.

Phoenix offers investors access to the OakFX trading platform, whose website said the company is "dedicated to the passive and semi-passive lifestyle income generation of its clients."

"Phoenix Forex is ideally placed for growth, working with an aging population that seek an opportunity to make money working from their home computers," OakFX's website said.

The FMA said it understood Phoenix Forex required investors to pay an up-front free of $25,700 to access the trading system.

"Phoenix Forex has previously advertised returns of between 50 per cent to 65 per cent per annum, and continues to promote the trading system as providing high returns. In FMA's experience, it is highly unlikely that this kind of investment can deliver such high returns. Phoenix Forex has not been able to provide any evidence to support its claims of having achieved these returns. Further, investments of this nature carry a high risk of loss of some or all of an investor's capital, and losses can exceed the amount of the original investment," the FMA warning said.

The Herald called Phoenix Forex's offices for comment but were told its director - listed on the Companies Office as Kendall Twigden - was out of the country.