1. Balance sheet recently updated by Meir Barak for 2017 shows just $375 in the bank (Link at bottom of page and picture above). Doesn't necessarily mean they don't have other accounts offshore stashing cash from overpriced educational courses.
2. There have been 7 different directors in 8 years. 6 have resigned.
3. Colmex Pro is located in known fraud zone Cyprus off of the coast of Turkey in the Middle East.
4. Broker TEFS is also in a known fraud zone Mahe, Seychelles an island off of the coast of Somalia in Africa.
5. Accounts are shutdown with just an UNREALIZED loss. There is no reason to have such a ridiculous stipulation unless you are trying to aid accounts in blowing up in order to avoid payouts.
6. You are not allowed to enter or exit trades after hours.
7. Archive.org lets you view older versions of websites. This shows Tradenet may actually be owned by Colmex Pro. If true, then its possible the model could actually be illegal. Tradenet is registered in UK currently, but was registered under the same address as Colmex Pro at one point.
8. There may be one or more recent lawsuits filed against them.
9. Meir Barak is listed as a director at Colmex Pro.
10. The educational packages are outrageously priced and people are really only paying for the CFD buying power.
11. They push promotion hard through affiliates and pay out referral fees.
12. Tradenet in the UK was incorporated in just 2010 despite claims it was 2004.
13. You could end up having issues with the IRS.
14. On top of high priced educational packages, they take a piece of your gains if you win, and also charge commissions. Promoters claiming they are winning conveniently forget to mention this.
15. If the company goes under, the money paid for overpriced educational packages is gone and so is buying power. In which case you could not make back the money you paid for the course. There is no protection from FINRA or SIPC if things go south.
16. There have been changes lately that could be suspicious such as not allowing many small caps, spread issues, and people claiming they have been switched from CFD's to equities without notice.
17. Most everyone I have come across with Shadenet has blown one or more accounts.
18. Meir Barak has only been Director for one year according to filings.
19. One of the supposed gurus Scott Malatesta was a zone manager at GMC.
20. Too much leverage can crush you (especially newbies).
There are probably many more red flags than the ones posted above, but this list raises some serious concern. There of course will be people who argue that Tradenet is great, the guys are legit, and they payout. These are the ones getting paid to promote it! The problem with ponzi schemes is that they have to payout for a while or the scheme crashes. So it can be very misleading to claim that some payouts legitimize the service. The best fraudsters are going to be smart and most genuine appearing. They have to build up trust first by actually paying out. All you need to do is watch a few episodes of American Greed to understand this. Victims always say things like "he was such a nice guy and I trusted him completely." Its up to you to do your due diligence, be smart, and use some common sense. Don't get sucked into the baloney hype that everybody seems to be selling. Both of the island locations of Colmex Pro and TEFS in known fraud havens alone are reason enough to keep me away. TEF Securities is actually located in the same area where Somali pirates kidnapped Captain Phillips who was then rescued by Seal Team Six. There was even a blockbuster movie about this with Tom Hanks. Come on now! Of course I wrote this article not to try and hurt anyone, but to save as many people as possible from being harmed by this company. Always remember that if something seems too good to be true, it almost always is. The worst thing that could happen is you spend time and stress building an account and then after requesting payout, it never comes because the company has gone under. Another concern about ponzi schemes is they tend to crash during a market downturn when many start to request payouts at the same time. This is what happened with the Bernie Madoff situation. In every single ponzi (and there are many) the culprits start out by paying the victims in the beginning. Another important thing to consider is that those people promoting this service by showing supposed "P&L's" (glorified excel sheets usually) are technically trading without emotion because its not their cash. Its like they are trading with a demo account so the results can be very misleading. But, many of them are not posting the fact that they blew at least one or more accounts. I've also noticed that several younger traders are promoting "Shadenet." And just be to be sure everyone knows, that is a huge red flag. If some 20 year old kid is claiming to be an experienced and successful trading guru, there is a 98% chance its baloney. Especially if the kid talks like a hooligan, wears backwards hats, promotes endlessly on social media, or curses relentlessly in his videos. They aren't making money trading, but through promoting these suspect services. The circus clown acts are widespread and its time for people to wake up! What are the chances these kids started at 15 years old and know what they are doing? Extremely low. Most kids this age are playing Xbox, chasing girls, and going to Justin Bieber concerts. Be smart and use some sense my friends! There is a sucker born every day and please don't let that be you. That's it, I'm done. Please email me if you have any further questions. Tread carefully, good luck to everyone, and I wish you all the best!
Relevant links to take a look at...