Additional Information
Thank you for the through reply. I really appreciate it.
Hi Guys,
I just thought I would put up some additional information to give you all some clarity. Unfortunately, my original post was deleted so I cannot re-post it exactly as before but I will endeavor to outline some of the salient points.
I worked briefly for CWM FX in December and resigned in disgust after just a couple of days.
1) It was an absolute boiler room. Seriously,it was truly beyond bad and truly intense (much much worse than what many of you may have seen in any film and I have seen a couple boiler room operations in real life). They had a large room at the Heron Tower office set up as a sales floor with salesmen crammed in two to a desk. They were standing up virtually all day (only two 15 minute breaks and a 1 hour lunch break were allowed). Nobody could sit down for more than a few seconds or they were immediately shouted at by a supervisor to stand up. The whole floor was standing almost all day from morning to 7 pm aggressively selling on the phone with constant shouting/pressure to achieve sales targets from managers.
2) There was a really huge turnover and people were being fired constantly (in my brief time there a handful disappeared and I worked there for only a couple of days !). There were no work contracts at all and there was an atmosphere of fear (with no employment contracts they could dismiss anyone at the drop of a hat and they very often did). They literally had deodorants on the desks as the place got very hot and sweaty (bringing new meaning to the words 'boiler room'). There was also huge pressure to sell through introducing brokers and employees were pressured into selling to friends and family (I am sure many of the people who invested on the platform were probably introduced by people they trusted).
3) After a short induction everybody was given the title of 'senior account manager'. I found they were mostly former wine/carbon brokers and some were just teenagers. Many members of the management team had a background from unregulated binary options firms (One 2 Trade, I believe) and some had no financial background at all (the general manager was a yacht skipper previously to the best of my knowledge). None of them seemed to have any idea about financial regulations and most had a very limited knowledge of the financial markets. Didn't inspire confidence.
4) In and of itself none of this was against regulations (perhaps employment regulations) just very very aggressive, highly questionable and unethical. What was very wrong was the extremely misleading sales practices. FX is very risky and people were being promised a safe 'second income' and no risk warnings of any kind were given. In fact, just the opposite, it was being touted as a new asset class with boundless upside, huge profits and rewards (In my previous deleted post I put up this link as evidence
http://uk.whocalledme.com/PhoneNumber/02036953844 ). This was totally against UK regulations regarding the promotion of financial services.
The company was spending massive amounts on fixed costs and marketing campaigns. I originally assumed that they were churning their clients to get maximum commissions out of them and not paying their staff after squeezing them dry and firing them. However, it still would not have been enough to pay for the Heron Tower office and all their marketing expenses and 'show'. There would never have been enough money to generate a profit from purely a forex platform for such an expensive operation and something was missing. Anyway, in my assessment, the figures still did not add up and something still seemed wrong.
Then I learned later what was really happening. Apparently, they were speaking to clients 'off the record' about a 'guaranteed investment' (there were posts on other sites about this I read and I had learned something about it while I was there). They were telling prospects that they had infallible traders at the office and a wealthy billionaire CEO who would underwrite losses (but he wasn't on the Times Rich List and I had never heard of him before). They also had a rent-free period on their lease. The assumption was that they were taking in this 'off the record' money without properly accounting for it. Of course, generating guaranteed stable risk-free returns on the highly volatile FX market is practically impossible. The assumption was that there would come a point where the 'investment' would not pay off and they would either pin it on somebody internally or say the money never existed at all or that it was sent offshore. Then they would bail out of the snazzy office and shut up shop. A classic Ponzi scheme (this is what another poster suggested on my thread and it seemed to fit the facts). A hallmark of Ponzi schemes, of course, is the 'guaranteed' or 'stable' and infallible investment.
Now irrespective of whether it was a Ponzi scheme or not. They did not have the license to market asset management services in the UK. They certainly did not have all the regulatory systems and controls in place for AML (taking money from clients 'off the record' as they were) and ...obviously...they were not giving people clear brochures or fact sheets as per UK regulations and their sales tactics were misleading. So it was still illegal.
It is impossible to say if they were running a Ponzi scheme without a full investigation (although, in view of their huge fixed costs and marketing and the 'off the record' way they took in the money, it would be the only plausible explanation that would make financial sense) but what they did was definitely against UK regulations nonetheless. Other explanations are possible (less than intelligent cowboy managers, lack of internal controls, a company over-extending itself etc).
Hence for this reason I gave 'my fellow man' a 'heads up'. Both potential employees (and existing ones for that matter) as well as future investors. Many of the employees there were naive or graduates working in their first job (many were desperate for 'experience' and there is no shortage of such in London for employers to abuse) so not all were to blame. I advised CAUTION and certainly made it clear I had no axe to grind and that I was not a disgruntled employee. I left it up to everyone to make up their own minds and do extra due diligence.
Incidentally, I don't think that Leverate was part of this. They are essentially a white label platform and probably had no idea of what was going on, although you could argue they should have been monitoring their partner.
Anyway, if anyone has made this kind of investment I recommend asking CWM FX for a refund of their money (something every regulated firm should be able to do) or at least evidence of their account balance. If they do not refund your money back perhaps speak to the Financial Ombudsman Scheme and carry on through the usual channels with the regulator. I hope in my heart that you have enough evidence/paperwork in terms of transferring money etc. that you can prove you paid in the money and that it wasn't handed over in cash or something.
Perhaps people who have paid into this scheme can post about the details of the payments ...was it sent offshore? Did you get paperwork? Do you have online access to your account balance ? Did you get a monthly statement of profits ? Did you get brochures ? etc
