The forex market has gained enormous popularity over the past decade due to the ease of trading over the Internet, the liquidity of the world’s largest market, and the flexibility of trading wherever wireless access is available. Crooks were quick to invade cyberspace with their anonymous offers, cloaked in apparent professionalism, but designed to deceive. Many novice traders responded to these offers, wired their funds to open accounts, and never saw their money again. The average victim lost $15,000 according to industry sources.
The obvious lessons are to be extremely careful when selecting business partners that you cannot face “eye-to-eye”. The Internet has been a great enabler, but the unscrupulous are also electronic-savvy in their techniques. Always beware of unsolicited offers, from whatever their source, whether from emails or ordinary phone calls. Err on the side of caution, and put greed aside. Lastly, never send funds to anyone that you have not validated as extremely trustworthy.
Corruption in solar industry
Another industry segment that has received a lot of hype of late is solar energy. Many governments have tailored specific programs to encourage the development of this technology as a renewable energy source for the future. It is clean, does not harm the environment, and is not dependent on fossil fuels. The rush across the globe has been more like a stampede. It was only a matter of time before fraud or corruption would surface in the press, as it did last December.
Many European countries have no direct source for oil, and as a result, energy expenses tend to be very high for citizens in these respective countries. Spain is one of those countries. Its government embraced the potential of solar energy in 2008 and created subsidies of €450 per megawatt hour of capacity for 25 years for solar panels connected to the Grid by 30 September 2009. The fledgling Spanish solar industry that was unprofitable suddenly turned “black” over night. A “Solar-rush” was on.
Within two years, Spain’s solar industry grew 900% and assumed the third largest capacity position in the world, behind the U.S. and Germany. Spanish authorities reduced the subsidy in July to €320, but it would only apply to active installations registered after the September deadline. Registration papers flooded government offices. An investigation soon revealed that 4,200 of the registrations were fraudulent. Some of the units were installed, but never hooked up to the Grid or turned on, while many were fakes awaiting validation that subsidies would apply.
As might be expected, an inventory glut ensued. Chinese freight companies actually auctioned off cheap Chinese panels for high prices before ever landing ashore. However, the demand peaked, and most buyers are in the process of returning the uninstalled units.
Perhaps Canadian Solar, a NASDAQ company producing solar voltaic cells, is a victim of these returns. The SEC has begun an inquiry suggesting that the company overstated revenues in 2009, thus creating a “pump-and-dump” scenario for its stock. Many law firms have also jumped into the fray.
Popularity and globalization create strange “bed fellows” these days. Be wary of each before you invest.
Editor’s Note: This article has been kindly provided by Cesar Zambrano, a fraud expert and writer at ForexFraud.com.
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