Customers claim they were lured into foreign exchange trading and lost hundreds of thousands of dollars – ABC News

Former customers of an Australian company claim they were lured into the high-risk world of foreign exchange trading under false pretences and subjected to high-pressure sales tactics which contributed to them losing huge sums.Key points:ASIC is suing foreign exchange trading company TradeFred, alleging it engaged in unconscionable conduct towards its clientsIn 2019 ASIC froze TradeFred’s bank accounts, leading to its collapse in 2020Two former customers who lost money say ASIC did not act fast enoughTwo men have spoken exclusively to ABC’s 7.30 about the alleged conduct of TradeFred, which operated a foreign exchange trading platform. Sales representatives allegedly told the men, who don’t know each other, to download remote access software so they could control their computers and direct the trades they made. 7.30 has obtained recordings of phone calls between TradeFred sales representatives and the men, which they say expose unacceptable conduct. At the time they had no idea the Australian operation had outsourced its sales and marketing to sales reps working for a company based in Israel and which had other business conducted from Cyprus. The men believe Australia’s corporate regulator ASIC was too slow to intervene to stop TradeFred, and fear they’re unlikely to get their money back after the Australian operations went bust. Do you know more about this story?Email michaelatkin@protonmail.com or contact him via the Signal secure messaging app +61 447 279 901. ASIC is suing TradeFred in the Federal Court, alleging the company engaged in unconscionable conduct towards its clients, with the case listed for trial this year. As part of the proceedings, it is attempting to have the net deposits of clients refunded.’A devastating effect’The regulator alleges TradeFred was taking the opposite position on trades to more than 95 per cent of its customers, so the company was making money when its customers were losing and was therefore incentivised to have them keep losing. Former TradeFred customer Geoff Moodie was very concerned to find out the company could have been betting against him.”I’m losing all my money and someone is winning on my loss? That, to me, hurts,” he said.Mr Moodie is a retired grandfather who lives in Ipswich, Queensland. Geoff Moodie says his retirement plans have been changed forever after losing money with TradeFred.(ABC News: Chris Gillette)He says had he known TradeFred could have been making money when he was losing, he never would have signed up.Mr Moodie’s retirement plans have changed forever.He’s lodged a claim for losses he estimates are over $140,000. “It’s had a huge impact. I think losing that sort of money in anybody’s life would impact them,” he said.”I’m not a millionaire, I’m just the average Joe on the street, and that sort of money has had a devastating effect on the family both emotionally [and] physically.”The liquidator for TradeFred has told 7.30 there are over $10.5 million in claims for losses.However, the Australian operation had over 2,000 customers and so far only a small number have submitted claims. From Bitcoin to foreign exchangeIn early 2019, Adrian Goddard was scrolling through social media and saw an advertisement for trading the cryptocurrency Bitcoin. The ad, which was endorsed by a celebrity, said you could start trading with just $US250, and Mr Goddard decided to try it out.The recordings reveal that on the first call with TradeFred the sales consultant said to Mr Goddard, “I understand you’re looking to extend your income, maybe thinking about the future, retirement, stuff like that?””I can tell you you’ve definitely come to the right place.” Adrian Goddard was initially interested in trading Bitcoin but says he was convinced to trade foreign currencies.(ABC News: Daniel Fermer)The consultant began discussing automatic trading software for Bitcoin, which would be supported by a TradeFred senior account manager, and then a trading account for Mr Goddard was established. ASIC alleges that TradeFred was mischaracterising the nature of its services by claiming to customers it had an automatic trading platform for Bitcoin, when it was not a service it offered. During the phone call, the consultant then quickly shifted the conversation away from Bitcoin to making money trading foreign currencies. TradeFred offered its customers access to the high-risk world of margin foreign exchange.Mr Goddard said he made it clear to TradeFred that he didn’t understand currency trading and they directed him on exactly how to trade. “They would basically tell me what to do, tell me what to trade on, and I kept saying to them, ‘Look, I’ve got no idea what I’m doing here, I don’t understand the markets,’” Mr Goddard said.”They had promised to teach me … but that never really came about.”‘I was very naive’Geoff Moodie also signed up after seeing what he believes could be the same social media ad Mr Goddard saw.On his first call with TradeFred, Mr Moodie made it clear he had no understanding of financial markets and was a complete novice who needed education. The consultant responded, “Wonderful, most of the clients, and I tell you honest [sic], 90 per cent of them, don’t have any previous experience at all. This is the reason I still have a job.”He also promised they offer far more than Bitcoin trading.”We are not just the cryptocurrency software … we are many other things,” the consultant said.The consultant then talked about how it’s possible to make 10 to 20 per cent on a monthly basis with a “low-risk market”, by trading in the foreign exchange, also known as the forex market. Mr Moodie said in hindsight the sales pitch was very slick and he believes he was misled. Both men say TradeFred instructed them to install remote access software onto their computers.(ABC News: Chris Gillette)”They were able to change my thought pattern from Bitcoin to forex, as they call it, without me realising it, or questioning. I thought maybe the Bitcoin would come at a later date, so, you know, I was very naive at that stage,” he said.Both Mr Goddard and Mr Moodie said TradeFred instructed them to install remote access software on their computers so the sales reps could monitor what was happening on their screens and direct their trades.This type of software is usually used to fix tech issues from an external site, but is open to abuse.ASIC alleges TradeFred account managers were using the software to find out how much money customers had available for transferring to trading accounts, and would show the customers what trades they should place.According to Mr Goddard, sales reps would make sure he was logged in to the software before showing him exactly what to trade on his screen.”The two main software items that we were using was AnyDesk and TeamViewer, which allows them to get access, obviously, to your computer and therefore they will be able to scroll around with their mouse and show you what they generally wanted … you to do in regards to trading,” he said.Trader was ‘absolutely panicked’ at lossesWhile he was prepared to accept some risk, Mr Goddard became increasingly concerned about the extent of those risks and made that clear on a recorded phone call.Mr Goddard said to the sales consultant, “What I’m saying, I’m not an expert in trades.”The consultant replied, “No, no you don’t have to be, that’s the beautiful thing.”That’s for anyone.”Mr Goddard replied, “I’d rather learn slowly rather than being thrown into what I’m looking at now.”The consultant persisted and Mr Goddard was pushed to keep trading. Adrian Goddard started having trouble paying his bills.(ABC News)Mr Goddard was trading in a high-risk area known as contracts for difference, where you speculate on movements in foreign exchange rates.The loss or gain depends on the price when the contract starts and ends, and if the price moves against you it can result in heavy losses. He estimates having spent more than $130,000 with TradeFred and mounting losses made him feel out of control.”[It was] devastating, [I was] absolutely panicked about what was going on,” he said.Mr Goddard’s trading put him in a tough situation where he was suddenly struggling to pay his bills.Mr Moodie claims that after suffering losses he was then encouraged by sales reps to trade back into the black.He now believes these were high-pressure sales tactics used on him when he was vulnerable. “These guys were well trained … and the pressure was, ‘Well, we can get around this, if you put more money in, we can trade this way, and we can trade out of the situation you’re in,’” he said.”Again, [it was] still new to me, [I was] still learning and I listened to what I thought I was being guided [to do].”Links to controversial company Union Standard This building in Myanmar is the listed address of Soe Hein Minn, who is believed to be the owner of Union Standard.(Supplied)According to ASIC, TradeFred was aware of customer complaints and made “aware of misconduct that USG (Union Standard) had identified during its reviews of telephone calls”, but the company took inadequate steps to stop the misconduct. TradeFred was acting as an authorised representative of a controversial Australian company which ran a global foreign exchange empire called Union Standard International Group.Union Standard is under investigation by liquidators after it collapsed with hundreds of millions of dollars owing to overseas investors and the liquidators have serious doubts about the true identity of a Burmese man, Soe Hein Minn, believed to be its ultimate owner. Jason Ward says Australia is “far behind global standards” when it comes to beneficial ownership information.(ABC News)Jason Ward is an analyst with the Centre for International Corporate Tax Accountability and Research.He’s looked…