Securities Division, 3rd Floor

Arizona Corporation Commission

1300 W. Washington St.

Phoenix, AZ 85007


Main: (602) 542-4242


Toll-Free Number in Arizona:
1-(866) 837-4399

Ask and Check
Before You Invest!

Toll free in AZ



Forex Investments

What Every Investor Should Know
Foreign currency exchange rates, commonly known as "forex," are the costs to exchange one country's currency for another country's currency. Since currency exchange rates fluctuate, traders can participate in the forex market as speculators (individuals and companies who buy and sell foreign currencies) hoping to profit from changes in the currency rates.

Forex contracts involve the right to buy or sell a certain amount of a foreign currency at a fixed price in dollars. Most forex trading is by governments and large institutional investors concerned about fluctuations in international exchanges rates. Individual investors comprise a small segment of the forex market. Thus, the average investor needs to be wary since, like any investment, forex offers can be subject to abuse and fraud.

No matter how it may be promoted, forex trading is a risky endeavor and may not be suitable for every investor. Like any investment, forex investments can be subject to abuse. Some promoters profit by charging high commissions or selling investment strategies. Others claim to have complex algorithms or propriety software programs that allow them to beat the market, which really don't work or don't exist.

Disclosure Documents 

Some FOREX operators pool your investment with the money of other investors to create an investment fund. Your equity or debt interest in the investment fund is considered a security and is subject to securities registration requirements.

The forex fund must provide all prospective investors with an extensive disclosure document. Commonly referred to as a Private Placement Memorandum (PPM) or Private Offering Memorandum (POM), the issuer of an investment fund should provide a disclosure document to all prospective investors that thoroughly explains all material information about the investment. Typically, this document is quite lengthy and should contain the following information:

  • Detailed information about the investment strategy
  • The risks associated with the investment strategy
  • The use of investor funds
  • Background information about the principals and managers of fund
  • The compensation that will be paid to the principals, managers, and solicitors
  • The fund’s business and operating history
  • The fund’s track record and trading history
  • Audited financials of the fund

Unlike forex dealers, individuals and companies that solicit retail accounts for forex dealers and manage those accounts, may not have to be regulated or affiliated with a regulated company, which exposes the investor to additional risk. Additionally, some promoters profit by charging high commissions or selling investment strategies. Others claim to have complex algorithms or propriety software programs that allow them to beat the market, which really don't work or don't exist. No matter how it may be promoted, forex trading can be a risky endeavor not suitable for every investor

Read more about how to recognize the warning signs of a FOREX fraud.

Ask and Check Before You Invest

You can obtain important background information about forex dealers and their salespeople registered with the Commodities Futures Trading Commission (CFTC) through the National Futures Association (NFA) at or by calling 1-800-676-4632

"The U.S. Commodity Futures Trading Commission (CFTC) warns investors to take precautions in protecting themselves from the many varieties of commodity frauds that are taking place in today's trading markets. The CFTC is the federal agency charged with regulating the commodity futures and options markets in the United States. We have seen a significant increase with the number of scams that falsely promise high profits with minimal risks. Many of these scams target ethnic communities in their language, from New York to Florida and from the Southwest to California, and also in other areas. "

As part of your due diligence, read more about FOREX investing and the questions you should ask before you invest.

The information provided on this website is not comprehensive, is not offered as legal or investment advice, and is not a substitute for competent legal or financial counsel. The Securities Division provides this information to give you an overview of the topics discussed. You should not rely on the accuracy of this information, but should carefully review all applicable statutes and regulations with the assistance of legal counsel.

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Arizona Corporation Commission

1200 W. Washington Street

Phoenix, AZ 85007


Corporations Division

1300 W. Washington Street

Phoenix, AZ 85007


Tucson Office (Walk-ins only)

400 W. Congress Street

Tucson, AZ 85701