Connor Walsh claims to have it all. A Lamborghini, the freedom of a £3 million mansion and a jet-setting job — all by the age of 25.
Standing in front of his indoor swimming pool, he starts to tell his 138,000 Instagram followers how he did it.
He struts over to his home bar and explains how you, too, can live like a king by trading foreign currency.
Insta riches: Forex trader Connor Walsh poses with a Ferrari in Dubai. In one social media post he gives a tour of his £3m ‘brand-new house’ – but the property is actually still up for sale
‘This is what forex has been able to bring for me,’ he boasts.
His ‘lockdown challenge’ — turning an ‘investment’ of just £250 into £5,000 — is an opportunity to see ‘how much money you can make during a very short period of time’.
‘Get involved!’ says Walsh, as he pours himself a drink.
But those seduced by the luxury lifestyle of Walsh and other high-rolling ‘bedroom traders’ could lose thousands of pounds on risky bets.
A Money Mail investigation reveals how high-profile social media stars are making money from naive investors by persuading them to join supposedly legal but unregulated trading groups.
The promise of a lavish lifestyle
The set-up is simple. Influencers post pictures of sports cars, exotic holidays and luxury homes, which they claim to have bought with cash earned from trading foreign currency.
Their followers are urged to sign up to expensive courses, which promise to teach aspiring traders how to make their own fortunes.
Hopeful investors are then told how the trader is supposedly betting on foreign exchange fluctuations, known as forex. These trading templates are known as ‘signals’.
Showing off: ‘Trader’ Dan Legg poses on a Lamborghini in a social media post. He charges up to £1,000 to teach amateur investors how to analyse markets
But Money Mail has spoken to would-be investors who have lost thousands of pounds to forex trading.
They say traders claim to be making the same trades as their students, but there is no proof of this. Campaigners also say betting on the foreign currency market is so unpredictable it should be classed as gambling.
There are also fears some traders could be acting illegally by providing investment advice without authorisation from the Financial Conduct Authority (FCA).
But influencers argue that their signals stop short of providing financial advice and do not break the law.
I hoped I could quit my job… but threw away £1,000
‘Loss after loss’: Telecoms engineer Gary Wilson thought he could win ‘financial freedom’
Gary Wilson says he was sucked into staking hundreds of pounds on risky bets by ‘traders’ flaunting lavish lifestyles on Instagram.
The telecoms engineer from Motherwell, Glasgow, says he thought he could win ‘financial freedom’ and even quit his job after seeing influencers boast of riches they claimed to have earned from trading forex.
Gary, 28, says he deposited £500 for trading ‘signals’ to Instagrammer Kez The Guru, real name Kieren Hamilton.
He says within the first two days he made £160, but from then onwards it was ‘loss after loss’ until the ‘full £500 was blown’ within weeks.
In April last year he deposited £350 for signals from influencer Dan Legg, who told him to copy the trades he was making.
Months later he realised neither Hamilton nor Legg were regulated by the FCA. He got his deposit back from Dan after threatening to report him to the regulator.
Legg recently appeared on a Channel 4 documentary How To Get Rich: Trading. The 20-year-old from Cheddar, Somerset, bills himself as a teenager who flunked his A-levels before learning how to trade from YouTube tutorials.
He says he made his first million by the age of 19 and has since doubled his profits. He charges up to £1,000 to teach amateur investors how to analyse markets.
Legg initially told Money Mail he did not sell signals. But after being told this paper had evidence to the contrary from April 2019, he backtracked and said he had not done so for more than a year. He says the FCA spoke to him and was ‘satisfied’ with his activities.
Hamilton was contacted for comment.
Earning thousands in commission fees
Insiders say some trading social media stars make most of their money in commission — rather than on the currency exchange itself.
The bedroom traders can be paid between £40 and £80 every time they convince a follower to deposit £250 with a third-party broking platform.
Kieren Hamilton, 23, from Hattersley, Greater Manchester, parades his wealth to 6,000 Instagram followers and boasts of making up to £10,000 a day.
The bedroom traders can be paid between £40 and £80 every time they convince a follower to deposit £250 with a third-party broking platform
Yet Money Mail has seen a video in which Hamilton admits that 99 per cent of his income comes from commission.
He claimed he would be made homeless unless his broker paid his commission in the video that was posted to his account last year. Hamilton did not respond to Money Mail’s request for comment.
So risky it’s like gambling
Connor Walsh’s recent posts document holidays to Dubai, Texas, Mexico and Switzerland as well as £45,000 shopping trips at Selfridges.
He boasts that forex trading is ‘tax-free’ and claims Direct Forex Signals is the UK’s largest forex trading group. A video uploaded to his YouTube channel on May 31 gives a tour of ‘my brand-new house’, in Prestbury, Cheshire, which he says is worth £3 million.
But the estate agent told Money Mail that the property is still for sale and Walsh had merely rented it for four months. Walsh says he never claimed to have bought the property.
Dan Legg, a 20-year-old from Cheddar, Somerset, bills himself as a teenager who flunked his A-levels before learning how to trade from YouTube tutorials
Walsh, from Stockport, Manchester, is also one of many influencers promoting the coronavirus pandemic as ‘a massive opportunity’ for those stuck at home to cash in on market volatility.
Laura Suter, personal finance analyst at AJ Bell, says the crisis presents ‘a paradise for people trying to flog their forex trading plans’ and has ‘created many more vulnerable individuals who are likely to fall victim to these schemes’.
She adds that claims made by some influencers of making large sums in a short period of time are ‘highly ambitious at best, and plain lies at worst’, while the risks involved in trading forex during market volatility are ‘much higher’.
The risks of forex trading are so great, even in normal circumstances, that campaigners want it to be classed as gambling.
Forex traders typically deal using contract for differences (CFDs) that allow investors to profit from price fluctuations, without ever owning the asset.
I had lost £2,000 before I turned 18
Lewys Griffiths was just 16 when he signed up to what he thought was a foreign currency trading course
Lewys Griffiths was just 16 when he was lured in by adverts on Instagram saying he could get rich quick by trading foreign currency.
He thought he was signing up to courses provided by expert traders.
Instead, he was bombarded with ‘signals’ showing lists of high-risk trades should he want to copy them himself.
The legal age for trading forex is 18, but Lewys, from Merthyr Tydfil, South Wales, was stung by 20 different unregulated ‘traders’ and lost £2,000. He says: ‘All of them knew I was 16 or 17 at the time and were happy for me to trade under my parents’ names.’
Money Mail has seen WhatsApp messages between Lewys, now 18, and influencer Jamie Shepherd, 22, from July 2018, in which Lewys explains he is having trouble signing up due to his age.
Lewys says the trading platform, which Shepherd referred him to, is ‘asking for third party authorisation but I’m under age… spoke to him on the phone to sort something without my mum knowing’.
Shepherd has more than 100,000 followers on Instagram, where he boasts of forex trading fortunes.
The Financial Conduct Authority has now added Shepherd and two Instagram pages linked to his name to its warning list.
A spokesman for Shepherd says: ‘Jamie Shepherd believes its businesses have operated in accordance with UK law.’
He added the signals did not constitute financial advice but said Shepherd has immediately suspended his service.
Regulated CFD firms often report that 75 per cent to 80 per cent of their accounts lose money. Investors lost more than £1 billion trading CFDs in 2018, according to the FCA.
Yet Connor Walsh’s website claims that 89 per cent of his signals are successful, while his analysts ‘ensure that every trade will go the way we predict’.
Matt Zarb-Cousin, of the Campaign for Fairer Gambling, says these ‘bets’ should be regulated by the Gambling Commission – meaning influencers such as Walsh would no longer be able to advertise it as a way of making money.
He says they ‘know that they are sucking customers into an addictive gambling product under the pretence of investment’.
The Department of Culture, Media and Sport says it will not be reviewing forex trading. But Mr Zarb-Cousin says ministers must take action.
‘This has fallen through the cracks between the FCA and the Gambling Commission,’ he adds.
Although forex trading is not regulated as gambling, it is taxed as such. It is VAT-free because HMRC believes it falls under the betting exemption.
Connor Walsh’s website claims that 89 per cent of his signals are successful, while his analysts ‘ensure that every trade will go the way we predict’
Millions lost to trading ‘scams’
The FCA says firms must be authorised to offer trading signals and financial advice on regulated products.
It says that some trading firms act without authorisation, while others ‘knowingly run investment scams’.
More than £27 million was lost to bogus online trading platforms in the year 2018/19, according to Action Fraud.
The number of reports tripled last year to 1,800, with the average customer losing £14,600. The FCA has added dozens of these so-called bedroom traders to its warning list.
Walsh and his company, Direct Forex Signals, had been on the FCA’s warning list since December 2018.
The page said: ‘This is a firm that we have been told is either operating regulated activities without the correct authorisation, or is running a scam. We strongly advise you avoid dealing with unauthorised firms like this.’
It was removed last month, but the FCA has not said why.
Parent company James Mills Ltd is registered with the FCA, but does not have permission to carry out investment activity.
Walsh says his signals stop short of providing financial advice and are not illegal. He adds that he makes it clear to customers that his signals are not investment advice ‘but an insight into a live trading environment’.
Reckless: The risks of forex trading are so great even in normal circumstances that campaigners want it to be classed as gambling
Mail dossier to be investigated
Money Mail has handed a dossier of 32 traders to the FCA, which says it is investigating.
The regulator has now added Kieren Hamilton and two of his Instagram pages to its warning list.
A spokesman adds: ‘We are aware that scammers are posing as forex, CFD or cryptoasset traders on social media, such as Instagram, enticing consumers with the promise of substantial profits with little if no risk.
‘It is important customers know that firms have to be authorised by the FCA to offer trading signals, copy trading services and financial advice on regulated products.
‘To do so without authorisation is a criminal offence and unauthorised traders should not be offering these services.’
Instagram says it does not allow ‘fraudulent or inauthentic behaviour’ on its platform.
A spokesman adds: ‘We have reviewed the accounts brought to our attention and have removed all that violated our policies.’
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