THIS DOCUMENT CONSTITUTES THE CONFIDENTIAL INFORMATION OF INVESTMENT
INTELLIGENCE CORPORATION AND IS NOT TO BE COPIED OR DISTRIBUTED IN
WHOLE OR IN PART. THIS DOCUMENT IS FOR YOUR INFORMATION ONLY.
Dear Valued Member:
Thank you for your patience and tolerance, and, most importantly, your support of
Investment Intelligence Corporation Pty Ltd (“IIC”) and Mr. Senen Pousa. We understand that you have been eagerly awaiting an explanation to the matters concerning ProphetMax Managed FX. It is our expectation and hope that the contents of this letter will fully and completely satisfy those concerns and clarify why we have taken additional time to prepare this letter in a way that is both meaningful and comprehensive.
You are a valued member of IIC, and we appreciate your continued support. As you know, IIC provides education in the area of personal development with a specific focus that
relates to passive income. ProphetMax is the brand name of the products and services we offer.
OUR RELATIONSHIP WITH GLOBAL FOREX MANAGEMENT AND IB CAPITAL
As part of the services offered, IIC has identified and researched high performing money
managers and traders and made the contact details of those third party service providers available for members to consider as part of their passive income vehicles or strategy.
Last year, we identified a new high-performing money manager, Global Forex, LLC, a
United States company known as Global Forex Management (“GFM”). The performance results provided by GFM reflected an excellent track record for achieving high returns. We decided that we wanted to make GFM known to our members.
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Before doing so, we discussed the process of referring members with GFM. In our
discussions, they were excited to be considered as a potential referral. However, GFM insisted that they only trade using a particular platform, and that they used IB Capital, a New Zealand broker dealer, to execute those trades. In the process of conducting our due diligence, we confirmed that IB Capital was indeed licensed in New Zealand. Further, because GFM traded using IB Capital’s platform, we requested that IB Capital confirm the performance track record of GFM. In response, in October 2011, IB Capital provided a letter, attached as Appendix A, stating the following: Global Forex Management has build up a sound track record and we can confirm that the numbers on the website of Global Forex Management are correct….IB Capital does not allow professional clients [like Global Forex Management] to post returns that cannot be verified and periodically checks their
websites to make sure that their websites are compliant.” (please note, the word
“build” was likely meant to be “built”)
Several months later, we requested that IB Capital again confirm the performance track
record of GFM. In response, IB Capital provided a letter dated February 20, 2012, attached as Appendix B, stating the following: “As per the track record of Global Forex Management, we confirm that they have indeed turned every $10,000 invested in October 2007 into $281,082 as of January 31, 2012.”
After completing our due diligence, we discussed the procedures necessary for our members to proceed with utilizing GFM if they so desired. GFM stated that to utilize their
service, our members who chose to do so would need to open an account with IB Capital. In our
discussions with IB Capital, they insisted that in order for our members to open an account with IB Capital, thereby having access to the trading skills of GFM, IIC must act as “Introducing Broker.” We made it absolutely clear that we are only willing to act as an Introducing Broker under the condition that IIC did not receive any commissions or income of any kind from IB
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Capital. Furthermore, we made it very clear to IB Capital that if IB Capital is required to make any payments to an Introducing Broker in connection with the transactions, all such payments would be earmarked strictly for charity. We have not received any compensation from IB Capital or from GFM.
Unfortunately, recently, we received several documents from IB Capital, along with a
demand that we sign those documents within 48 hours of receipt. After seeking legal advice, it was revealed to us that the documents were back-dated to December of last year and that signing those back-dated documents is unlawful. We immediately decided to terminate our relationship with IB Capital. We will no longer refer any members to IB Capital.
We are dismayed by IB Capital’s unreasonable demand of us in requesting that we break
the law, and we are equally dismayed by IB Capital’s blatant misrepresentations of the facts and circumstances of our relationship.
NEITHER INVESTMENT INTELLIGENCE CORPORATION NOR MR. POUSA
EVER HAD AUTHORITY TO TRADE YOUR ACCOUNT AND NEVER
DIRECTED THE EXECUTION OF OR PLACED ANY TRADES IN YOUR
ACCOUNT.
IIC only has access to confidential information you may have provided to IIC in
connection with your membership. At no time whatsoever did IIC ever share any information you provided to IIC with IB Capital, GFM, or any other person or entity. IIC values members’ right to privacy and their relationship with IIC.
However, with regard to those of you who opened a margin forex trading account with IB
Capital, we understand that you signed several agreements with IB Capital. For example, we understand that you signed at least the following IB Capital required documents:
1. An account opening document whereby IB Capital opened a margin forex trading
account for you;
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2. A Trading Agreement whereby you acknowledged reading and understanding all of
IB Capital’s trading policies and risk disclosures in connection with margin forex
trading (the “Trading Agreement”);
3. An Additional Risk Disclosure statement whereby you acknowledged fully
understanding the high level of risk involved in margin forex trading (the “Risk
Statement”); and
4. An IB Capital LP. Third party limited power of attorney whereby you appointed
“ProphetMax Managed FX” as your designated authorized trading agent (the “LPOA”).
IB Capital is a broker-dealer that is only legally allowed to execute trades made by the
account holder or an authorized power of attorney. To our knowledge, you did not personally direct the trades in your account, and you did not sign any power of attorney authorizing GFM to be your designated authorized trading agent who could direct the trades in your account.
Accordingly, it appears that IB Capital had no authorization to accept trading instructions from GFM concerning the money in your account. It appears that IB Capital gave GFM access to your confidential information and to the money in your trading account without your permission. To be clear, IIC and Mr. Pousa never directed the execution of any trades in your account with IB Capital and never placed any trades in such account. In fact, neither IIC nor Mr. Pousa had any access to the confidential agreements you signed with IB Capital. IIC and Mr. Pousa certainly never had any access to the money in your account with IB Capital. While we believe you signed a power of attorney appointing “ProphetMax Managed FX” as your designated authorized trading agent, the appointment was a drafting error. As a result, that power of attorney is of no legal force and does not actually authorize any person or entity to direct the trades in your account. ProphetMax Managed FX is the name of an area of the website where IIC places names and information about money managers and traders with high performing track records. ProphetMax Managed FX is not the name of a registered entity. Therefore, under the law, ProphetMax Managed FX is not a legal “person”, has no legal rights, mand has no authority whatsoever under the LPOA. The LPOA is and has always been invalid and is entirely useless.
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Further, the LPOA was never accepted by any person or entity, and it was never utilized
in any manner. AT NO TIME DID IIC OR MR. POUSA EVER DIRECT ANY TRADES IN
YOUR ACCOUNT WITH IB CAPITAL. GFM directed the trades in your account. IIC and Mr.
Pousa never had authority to grant IB Capital or GFM any rights to your account and never even attempted to do so. The LPOA was never assigned to either IB Capital or GFM, or any other person or entity. Accordingly, it does not appear that GFM had any authority to take action in your account.
IB Capital had the responsibility for ensuring that the party directing trades in your
account was lawfully authorized to do so. It appears that IB Capital failed to perform its job and accepted trades by an unauthorized trading agent, GFM. This apparent error on the part of IB Capital has nothing whatsoever to do with IIC or Mr. Pousa. IIC merely made an introduction to IB Capital and GFM, and nothing more.
WHAT TO DO NOW?
We highly suggest you contact IB Capital and GFM directly to resolve any issues you
may have concerning your trading account opened with IB Capital and traded by GFM. We
suggest you direct your questions or concerns to the following:
IB Capital: Liam Dunne
Email:
[email protected]
Phone: 64 4 974 9415
GFM: Kevin Clarke
Email:
[email protected]
Phone: 1-302-604-7803
As you may know, IB Capital is a registered company in New Zealand. IB Capital is part
of a free and independent service for settling disputes between consumers and companies like IB Capital. To file a complaint, you can go to IB Capital’s website by clicking on the following:
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Financial Dispute Resolution. In addition, you may contact the Financial Markets Authority in New
Zealand and make a complaint or report misconduct. To do so, you may access the FMA
website as follows:
Page Not Found | Financial Markets Authority
.
To the extent that you are bound by any non-disclosure agreements with IIC whereby you
agree not to contact IB Capital or GFM directly, we specifically waive such provision (of course, such waiver does not affect the remainder of any such agreements, which agreements shall continue in full force and effect).
YOU ARE AUTHORIZED TO CONTACT IB CAPITAL AND/OR GFM DIRECTLY.
As you know, our primary goal has always been to do our best to teach you strategies
about how to invest and to teach you an understanding of body, emotion, breath and mind and their relationship to personal life and financial results. We look forward to continuing to do so.
