Equitable Securities Trading Over Efficient Securities Trading

The NYSE’s decision to expand floor trading comes in contrast to most securities brokerage firms decision to opt for electronic trading. Electronic trading’s automated exchanges make it an efficient means of trading. Through electronic trading, stocks and securities are distributed on a first-come-first-serve basis. Despite electronic trading’s popularity for providing fast trading solutions, it is not without its downsides. Critics say electronic trading creates an uneven playing field for investors. Beginning investors or ones with less access to electronic trading technology are out-paced by high-powered firms.

Accessibility for Investors

NYSE executives state their hopes to establish their trading floor as an accessible and equitable marketplace to trade and invest. In addition to the wider selection of securities available to investors, NYSE executives hope that expanded floor trading will reintroduce transparency into securities trading. While speed and efficiency are important components, sole reliance on those factors mean an increased risk of fraud. Conversely, investors must also be aware of risks associated with the increase in floor trading availability. Investors always need to make sure of performing due diligence before closing on any trade.

A Resource for Investors

Savage Villoch Law is here for our clients. If you have more questions on what this change means for securities trading or general investing questions, contact our expert team today and we will make it our goal to get answers for you.

Luring Investors with Day-Trading

The scammers lured investors with the low-risk nature of day-trading. By exaggerating low costs and fees and high leverage of day-trading, the phony firm managed to entice investors in more than 30 countries.

Targeting Inexperienced Investors

These scammers specifically targeted inexperienced investors in their scheme. Inexperienced investors are typically much more prone to investment scams. While no one should be intimidated by investing their finances, new and inexperienced investors should watch out for signs of fraud. Before making any commitments, investors should:

• Avoid investments promising low-risk/high-returns
  • In this case, inexperienced investors were lured by the day-trading firm offering high-leverage and low costs.
• Research the investment firm/broker for past deals
  • Two scammers operated a fraudulent firm, Nonko Trading, an unregistered brokerage firm. Investors can search the SEC’s database of registered broker-dealers and firms.
• Confirm Transactions and Investment Returns
  • These investors’ funds were never even routed to the market. Instead, they were sent directly to the scammers pockets. For investors who asked to close their accounts, scammers allegedly made “Ponzi-like” forms of repayment.
• Familiarize with Investment platforms and software
  • Nonko Trading perpetuated its scam through a false trading platform. Rather than using a live trading platform, the scammers used a training software that simulated securities trading.

Learning From Experience

The fact is, all investors are susceptible to risks. The lesson to be learned is that due-diligence and practical investing goes a long way in minimizing unnecessary investment risks, like fraud. While one must learn from personal experience, there is a network of resources out there to help inexperienced investors and empower them by learning through shared experience. Savage Villoch Law, PLLC has more than 20 years of experience defending investors and financial securities consumers. If you need help defending your financial security, contact us today.