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Financial Management Direct

BEWARE OF THIS ORGANISATION 

 Dear Sir

      We refer to your email below.

2     Financial Management Direct is neither licensed nor regulated by the
Monetary Authority of Singapore ("MAS").

3     We suggest that you refer to the MAS' publication on "Pitfalls of
Dealing with Unregulated Persons", as follows:
     
http://www.moneysense.gov.sg/publications/quick_tips/Consumer_Portal_Dealing_With_Unregulated_Persons.html

4     To check if an entity is regulated under the various Acts
administered by MAS, you can refer to the Financial Institutions Directory
which is available on MAS' website at the link below:
     
http://www.mas.gov.sg/frames/directory/index.htm


Elwyn Chan
Associate (Capital Markets Supervision)
Capital Markets Intermediaries Division
Securities and Futures Supervision Department
Monetary Authority of Singapore

 

30th October 2006

 

Introduction

 

www.financialmanagementdirect.com

 

 

This is a website, advertised in the Spanish Expat press, provided by unregulated advisers in Spain promising high returns.   It is about investing in options.  Even assuming this is a genuine advertisement (many similar ads have proved later to be scams) it is an extremely high risk opportunity with the potential to not only lose the whole of your investment capital but losses beyond the amount originally invested.

 

Options

 

Options give the holder the right to sell shares at a pre-agreed price (a “put” option) or to buy at a pre-agreed price (a “call” option).  The person providing the option (the writer) usually receives a premium.  The option period is set at the outset (e.g. 3 months).

 

The results work out as follows:

 

 

Price Increases

Price Decreases

Call Option:      Holder

GAIN – uncapped

LOSES – premium

                        Writer

LOSS – uncapped

GAINS – premium

Put Option:       Holder

LOSES – premium

GAINS – uncapped

                        Writer

GAINS – premium

LOSS – uncapped

 

You can see that depending on price movements, an individual can lose unlimited amounts of money.

 

Risky

 

The language used to sell these options is opaque.  The facts are very simple:  they are high risk and you can lose a lot of money, even more than you originally “invest”.  In other words you can have unlimited losses.

 

Our Verdict

 

Run a mile!

 

 

 

 

© COSTA DEL SOL ACTION GROUP
Against Unlicenced Financial Advisers & Product Providers that support them.