Michael Kong
KUCHING (June 22): Members of the public have been urged to conduct thorough checks before depositing funds or participating in any investment platform.
Stampin MP Chong Chieng Jen’s special assistant Michael Kong said investors should verify whether a platform was properly licensed and regulated by the relevant financial authorities before committing their money.
“Unregulated or questionable schemes may expose investors to severe financial risks,” he said in a statement on Monday.
Kong remark’s came after he was approached by an investor, identified only as Ngo, who claimed to have suffered losses after participating in an online investment and trading platform known as ‘Fintana’.
Ngo, who declined to disclose the amount of his losses incurred, said he opened an account after coming across an online advertisement promoting the platform.
Kong said Ngo was informed that the platform utilised artificial intelligence (AI)-generated trading strategies, with brokers assigned to guide investors in their trading and investment activities.
Encouraged by initial gains, Ngo continued investing and trading through the platform.
He was also regularly contacted by an assigned broker through Zoom meetings to discuss trading decisions and strategies.
However, Kong said the platform allegedly allowed trading leverage of up to 1:400, which carries extremely high risks.
“Such levels of leverage mean that even small market movements can potentially result in devastating financial losses,” he said.
He said Ngo became concerned when the broker began recommending trades that subsequently suffered substantial losses.
In an attempt to minimise further losses, Ngo decided to activate a stop-loss measure and exit the trade.
“Instead of respecting Ngo’s decision as an investor, the broker allegedly rebuked him and accused him of undermining their strategy and trading position,” he said.
The incident caused Ngo to become suspicious and uncomfortable with the platform’s conduct.
“Every investor should have the right to independently decide when to enter or exit a trade, particularly when trying to manage risks and minimise losses,” he added.
Kong said Ngo later noticed that the broker continued executing trades, which allegedly resulted in further losses.
He also claimed the broker encouraged him to deposit additional funds into the account in order to continue ‘cost averaging’ the losing positions.
“Ngo now fears that due to the extremely high leverage involved, there may eventually be attempts to pursue recovery of the alleged trading losses against him.
“Should such a situation arise, I will assist him in whatever way I can,” he stressed.
Kong added that Ngo chose to share his experience not because he expected to recover his losses, but because he hopes his experience can serve as a public reminder and lesson to others.
“He openly admitted that there might have been a lapse in judgment on his part in trusting such online investment platforms too quickly,” said Kong.
Kong reminded the public to exercise extreme caution when encountering online advertisements promoting investment opportunities or trading platforms with promise easy profits.
He also advised investors to be wary of platforms or brokers that encourage excessive leverage trading and pressure clients into depositing additional funds.
“I hope Ngo’s experience serves as a vital reminder to the public to remain vigilant, cautious and responsible before investing their hard-earned savings into any online platform,” he added.
