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Investor Alert List helps investors dodge dodgy deals

Investor Alert List names companies not licensed, authorised or regulated by MAS

Published on Oct 7, 2012 6:00 AM
Gold trading firm Genneva, which is under investigation by the CAD for alleged “financial improprieties”, had itsOrchard Tower offices raided last Monday. It is on the Investor Alert List published by the MAS. -- Photo: LIANHE ZAOBAO

If the controversy over the Genneva gold trading firm is anything to go by, it proves the adage that if something sounds too good to be true, it probably is.

The firm's business model involves pricing the physical gold bars at a premium of 20 per cent to 30 per cent over the market price.

Customers are given a discount of about 2 per cent off this list price. The company then promises to buy back the gold at the list price after one or three months. This effectively works out to a return of 2 per cent once the company buys it back. If the customer does this every month, the annual return could work out to some 24 per cent.

Two rival trading firms, Gold Guarantee and Asia Pacific Bullion, have now stepped in to offer Genneva customers similar terms.

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Background story


The Sunday Times looks at the various schemes offered by unregulated entities and how they work.


  • Case in point: Genneva, a gold trading company offering a buyback scheme. The company has been taken to court by a customer claiming $190,000. Other customers may also sue.
  • How this works: Some gold buyback schemes offer returns of 18 per cent to 30 per cent a year. They usually involve the customer taking on the credit risk of the scheme operator, says financial education service MoneySense.
  • Risks: To run this business, the company needs to earn even higher returns than what it has promised, in order to cover costs such as rentals, commissions and salaries. Investors should exercise caution with such schemes offering handsome returns in a short space of time.


  • Case in point: Profitable Plots, a local land banking firm, sold plots in Britain and the Philippines to investors here. It was investigated by the Commercial Affairs Department in 2010, following complaints by investors who claimed that they had not been receiving payments.
  • How this works: Land banking is the practice of purchasing undeveloped land with the goal of selling it later for a profit, often to a developer. The land is usually on the outskirts of a city, with some potential for urban development. Investors buy small plots and are told that developers will be willing to buy the land at higher prices when it is developed or plans for its development are drawn up.
  • Risks: If the land being sold is located somewhere that investors are unfamiliar with, they may not be able to confirm that the plot is as promised or if the necessary approvals have been secured for redevelopment.


  • Case in point: No cases involving this form of trading have made the headlines yet. But the Monetary Authority of Singapore’s Investor Alert List includes forex trading firms such as FXCM. Another entity on the list, known both as “Swiss Cash” and “Swiss Mutual Fund”, may be linked to a forex trading firm called CMFX as its website redirects to CMFX’s page. It is not clear whether FXCM and CMFX are related.
  • How this works: Foreign exchange, or forex trading, involves betting on the movement of currency exchange rates. It is typically fast-paced and high-risk.
  • Risks: Marketing testimonials may make forex trading seem appealing or easy, but retail investors without professional experience could get burnt. This can occur even if investors buy the recommended software, turn up for coaching sessions or workshops, or place the same trades as a forex guru, according to MoneySense.