TWO years ago, manufacturing planner Tan (not his real name) came to know Lau, who said he worked at the subsidiary of a forex trading company called RCFX .

He had found out about the 26-year-old Lau via social media before they started to meet at cafes to talk about forex trading – which Tan would end up losing money in.

Tan gave Lau a sum of money to invest in forex trading, and saw his investment grow in the beginning. After a while, however, he realised that something was wrong as he and others like him could not withdraw their money.

“The economy was not very good at the time. So like many others, I wanted an investment that would generate good money. Some had made money.

“The returns were better than what banks offered. For example, if you invested RM10,000, you would get at least 4% in returns if you traded manually. Robot (automated) trading would get you over 10%. It was better than (what) banks (offered in interest rates),” he said.

Tan, 29, said he and other investors saw their investments generating profit when they checked the trading account at first.

Since they were making money, they wanted to withdraw some, but Lau discouraged them from doing so.

“The classic excuse was, we should not do it because withdrawals would reduce our capital. Most investors listened and reconsidered,” he told a press conference earlier today at Bukit Mertajam MP Steven Sim’s office.

Last year, Tan and others like him started to ask questions and demanding their money back.

“We felt something was off because none of us got to enjoy our returns. Some of the investments via robot trading also generated losses,” he said.

Apart from Tan, there were 28 investors aged between early 20s and late 50s, who joined the investment scheme between late 2014 and last year. Many were related or were friends with one another.

Their combined investments totalled RM703,000. The biggest investor had put in RM150,000.

Tan said Lau agreed to pay them back, but said the money for all of them would be banked into a single account.

“Of course, such a huge amount will trigger the (alert in the) bank and raise questions. He changed his mind later about returning the money,” he said, adding that only one investor got US$2,000 (RM8,400) back.

Tan said the company office on Persiaran Karpal Singh had been closed since mid-last year.

He said he and other investors tried repeatedly to reach Lau last week but could not get him on the phone.

“We heard he is in Kuala Lumpur, that he is doing another business and has connections with some influential people. We are also worried of the consequences of highlighting this to the media,” he said.

He said the forex trading company had since changed its name and moved to Malacca where it had links with a property developer.

Tan said two police reports were lodged on Penang island and mainland on July 22, but there had been no progress in the case.

Sim urged the police to look into the case, adding that such cheating must be arrested to prevent others from falling victim.

He said Bank Negara (BNM) needed to do more than put companies offering unlicensed financial services on its financial consumer alert list.

“The central bank needs to play a bigger role. If the company or money game operator is doing something illegal, take action. 

“Don’t just put the companies on an alert list. It gives the impression that it is just a warning, like the warning messages against smoking on cigarette packets,” he said.

As of August 28, BNM has 394 companies on the list. RCFX made the list in March last year.

Other unlicensed financial services providers that have made the news recently are Penang-based forex trading scheme operator JJ Poor to Rich (JJPTR), and virtual shares operator MBI International.

JJPTR is under investigation for cheating after it ran into trouble in April due to an alleged trading account hack.

MBI is being probed for allegedly running an illegal pyramid investment scheme and alleged money-laundering. – September 10, 2017.