The Tribune

The Securities Commission yesterday warned Bahamians against joining a group it alleged is operating as a multi-level marketing or pyramid scheme despite lacking the necessary regulatory approvals.

The capital markets regulator said Cash Forex Group was "targeting citizens of The Bahamas via numerous" Internet Zoom meetings to persuade them to invest money with the scheme, and encourage others to do likewise, even though it was operating illegally in violation of this nation's laws.

Pointing out that neither Cash Forex Group, nor its agents and consultants, were registered with the Securities Commission to conduct such business as required by Bahamian law, it added that the group employed several names including Cash FX Group, Cash FX Group S.A, CFX and CFX Group.

"The Commission has determined that Cash Forex Group is a multi-level marketing (MLM) entity using the website https://cashfxgroup.com. There are several levels by which individuals may join the plan, the lowest being $300. Each level has a different percentile payout, with the larger pay-ins paying a greater percentile of any purported profit earned," the Securities Commission said.

"The Commission is aware that Cash Forex Group, via Zoom presentations, continues to inform of entering into contracts with Bahamian citizens to trade on their behalf without having a license from the Commission to do the same."

The Securities Commission added that Bahamians were being told that the group's "members or participants here in The Bahamas do not have to conduct trades themselves, as there are teams of professionals at Cash Forex Group who trade on their behalf, despite the fact that Cash Forex Group and its agents are not registered with the Commission to trade for others".

Other selling strategies employed, according to the regulator, are that "Cash Forex Group’s Bahamian clientele would earn 1 percent interest per day for five days of the week on money invested with Cash Forex Group.....

"Current Bahamian participants have been encouraged, via Zoom meetings, to facilitate the signing up of new participants and their subsequent depositing of cash with Cash Forex Group, an act for which the facilitators are financially rewarded."

The Securities Commission said regulators in the UK, Canada and Panama have already issued warnings about Cash Forex Group not being licensed to operate in their respective jurisdictions.

Multi-level marketing strategies can be pyramid schemes, which the Securities Commission has issued warnings about in the past. Pyramid schemes are scams where promoters claim they can turn a small investment into large profits within a short period of time. In reality, participants make money solely by recruiting new participants into the programme.

The scheme gathers momentum until it crashes. Fraudsters behind such schemes typically go to great lengths to make their programmes appear to be legitimate multi-level marketing (MLM) schemes, but they eventually fall apart when it becomes impossible to recruit new participants, which can happen quickly.