Monday, January 28, 2008

Fall from Grace.

So let's all trade "my worst day ever" stories shall we?

In one simple email, from a person that I thought I could trust to get things done properly - laid the very worst case scenario position I could ever hear about. Horizon FX Investments was linked to Razor FX Investments in a Fraudulent Ponzi scheme that would wipe out at least 26M of investor money from our side of the fence. Talk about a hard pill to swallow...

At this point in time, I was sitting in a meeting learning more about purchasing Real Estate, and I had already marked myself down for 3 properties - none of which I'd have the money for at the drop of a hat. As I read the email, I felt sick to my stomach, and simultaneously thanked the stars that there was a cease trade order on Horizon to prevent even more of my friends, family, loved ones and acquaintances from further harm. The thought of hurling myself off of the penthouse balcony shortly after the presentation also sounded quite inviting at the time as well, but if it hadn't been for my wife, and baby on the way the lure of the pavement below might have enticed me to try and fly.

With the thought of suicide passing through my mind - the very next thought I had was to immediately find Gem to ensure that he didn't jump himself. First of all was that he was a friend from my previous life at Business Objects - second was a selfish thought that he was my only connection to the supposed "traders" that had run off with our money! Needless to say, the last pieces of the presentation were a blur, but I'll get back to that LAND opportunity later. I'm starting to seriously think that real estate might be a really damn good option to pursue at this point in time seeing as I can touch the ground, the bricks, swing the door and ride up and down the elevator to convince myself that it is, in fact: REAL.

Needless to say there was a bit of a panic among my 1000+ customer base (how much of it is still around I have yet to find out) who trusted my initial due diligence on the historical reports that HFX provided. For those of you that know me - I am a novice forex trader, but knew enough back then how to back test the data - and it all came back just fine. However the problem was that I had stopped testing the new data, and chalked it up to a typo when my Chief Trader overseas told me that the reports were off a few times in the last few weeks. Lesson learned - never stop testing. Next time, that'll have to be part of the situation - among many other safety methods for the collective investment group.

I've had some time to cool off and think things through a bit. Hindsight being 20/20 - here's a summary of the lessons learned so that nobody repeats the same mistake:

1) I don't care how long you've known the person running the company - get background checks on the traders and the principles of the company and all that are involved. PERIOD. Never trust anyone to get it done for you - no matter what. Make friends with the police and get a regular account going with them. Hell, make friends with the gangsters so they can run background checks from their end. Do what it takes to make sure that the investment is running clean.

2) Apart from due diligence, the next step in the phase is vigilance. Check, doublecheck, triplecheck, and keep checking as a religious ritualistic procedure to ensure that you don't get caught blindsided by evidence that would point to your investment not being as "sound" as the owner says it is.

3) Learn the industry. You don't have to become a master at it, but learn enough to network your way to the people who are strong enough to help maintain the vigilance at a level higher than your own. Then strive to increase the thoroughness of the testing. You can never be too sure. Taking a calculated risk is required - but keep your hands on the calculator.

4) Diversify, not diworseify. From now on in, I'm going to fix the spread on my investments across multiple markets, and adjust more often. Currencies, Stock, Real Estate, Commodities.


To all of the investors that have believed in me on this one - I apologize. I truly didn't see it coming. I think my immediate and extended family lost just over 2M on this. Hence lesson #4 - I'll keep in mind not to overextend again - ever. I had personally tested EACH and EVERY line of the historical reports and they fit to the graphs that I have purchased. These guys were professionals in this arena - so let's all be better prepared for next time.

What are the next steps to take?

1) Seek legal counsel.

2) Join others that are looking to either a civil suit or class action suit

3) Collect all email or written documentation with HFX.

4) Save all your weekly reports

5) Ask your bank for all documentation that supports deposits or withdrawals

6) Talk to your accountant about possible write-offs from this investment loss.

7) Contact the BC securities commission to see what they are doing about this.

8) Keep your head up. This sucks for everyone but the only way you are a victim is if you let this defeat you.

9) Call the US DOJ and get a claim number if you can.

10) Find the case number and post on this site so we can all keep updated.

11) Contact any other investors that you know and alert them about this site so that we can work together as a team rather than lost individuals.

12) Contact the BC or Canada DOJ to see what kind of help they can provide us all.BC - CAN -


On a personal note - although I too was burned by this, I'm creating a fund from my other investments to work on helping those that overextended to the breaking point financially. It's not that you shouldn't be more careful and expect someone to come bailing you out in a riskier endeavor - however if you came in under my wing, or the Infiniti Point flag - know that I will not rest until I have protected each and every last one of you, at least to an extent. We're currently looking over our legal options, alongside other avenues to recoup what we can from the lost money. The iPoint HFX victim's fund will be started immediately to help those in need. I'll also be contacting accountants to give us options on mitigating the loss in its current form to our utmost advantage (tax write offs - hopefully something other than capital loss/gains).

With a heavy heart - it's hard to start the year out with a large loss, but it's only through a fire that a phoenix is re-born. I still believe this is a year for opportunity. It can't get much worse than this now can it? Join the group currently at the hfxscam wiki to find out more information as things progress. Check out Karl's blog for more too.

Although the sound of a "normal" job sounds really enticing to even me right about now, I still do believe that there are opportunities out there for someone in the middle class to attain a higher standard of living without the need to sacrifice time that could be spent with family and more pleasurable and humanitarian pursuits. So keep your head up, don't let this loss drag you down, and keep striving to reach the Infiniti Point. I dreamt that I touched it once - and I still believe that it is within our reach to find a true and real opportunity out there. I've been demoted from a humble student to a now shamed and humble student. All the more reason to work harder at working smarter.

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