Winners Circle? You’re likely to end up a loser!
J.S. writes: I have been invited to join the Winners Circle, a multi-level marketing company. It seems you earn an income from recruiting other people, and also from currency trading signals they send daily. However, I can find no address for the company. Is this a legitimate way to earn extra money?
WINNERS CIRCLE is not legitimate. It is not even a company. It is nothing more than a name used to suck people into the clutches of a dodgy American business called IM Academy, which advertises training courses on how to make money by trading on the foreign exchange markets.
British-based Winners Circle was set up by two experienced MLM (multilevel marketing) operators, Simon Brookes and Roger Garth, with slogans like: ‘Winning at forex is easier t han you t hink. Just f ol l ow our system.’
Recruiting material signed by Garth tells recruits that the Winners Circle receives tips from professional forex traders: ‘When they identify a trade that they believe will be profitable, they send it to you via a mobile phone app; you then follow the instructions given to place the trade including what to buy or sell.’
In a YouTube video, Brookes claims the scheme ‘is a licence to print money’. He then hands over to Garth, who talks about the trading signals they issue to their members, assuring them that ‘some have all the information you need to trade, even if you are a complete newbie’.
The tips on which currencies to trade come from IM Academy. According to Garth: ‘Simon and I will continue to analyse every signal sent by IM.’ And he pledges: ‘We will only send signals we are prepared to put our own money into.’
Now, I cannot question Garth about any of this as he died recently. But Winners Circle is continuing under Brookes, who told me that members pay $234 (about £170) to join, followed by $174 a month.
The joining fee goes to IM Academy, but a big slice of the monthly fee goes to the recruiter, so Brookes gets a major share of payments made by his recruits. This is how MLM works.
The big question is whether all this is legal. I do not believe it is. Telling people how to invest is educational, and needs nobody’s permission.
But telling them what to buy and sell is financial advice, pure and simple, and anyone offering this service has to be vetted and authorised by the Financial Conduct Authority, or they could face up to two years in prison. Despite all the written claims and the video evidence, Brookes insisted to me that he needed no FCA approval, saying: ‘We are only an educational opportunity and we never give any advice.’
So what about the trading signals and the mobile phone messages, telling members what to buy and sell?
According to Brookes, this does not count as advice because it is up to Winners Circle members to decide whether to invest. Of course, the same could be said of any genuine stockbroker who gave a share recommendation to a client, but the broker still has to be authorised by the FCA.
IM Academy and the company behind it, New York-based International Markets Live, are well known to financial watchdogs.
Regulators in Spain, Belgium and France have issued public warnings about them. And in 2018, the Commodity Futures Trading Commission fined the company $150,000 for operating an unlicensed scheme which let investors ‘mirror’ forex trades made by its own traders.
Our own Financial Conduct Authority is well aware of International Markets Live. It warned investors three years ago to stay away from it, as it is completely unauthorised.
So what does it think of Winners Circle? A few days ago, the FCA told me: ‘Where new information comes to light, we will always take this into account when dealing with reports of unauthorised business activity.’
Well, so much for the FCA’s 2018 alert. But now it knows that a British-based bunch is actively recruiting for the very service it warned against, will it do anything stronger than simply posting yet another warning on its website?
The FCA long ago lost sight of the fact that it was created to protect consumers from financial harm. It now prefers to devote time and energy to areas such as monitoring ‘diversity’ in the financial sector. Here is a chance for it to take real action, but I am not holding my breath.