All You Need To Know About The Forex Trader Who Lost RM500 Million Of Investors' Money
On 20 April 2017, investors of Penang-based Forex trading company JJPTR were perplexed when they found themselves unable to log into their accounts
Efforts to contact the company's staff were met with no response. Some went to JJPTR's offices to get some answers, only to find that the offices are closed.
Later, news portals The Star and Borneo Post reported that the investment company has "collapsed" after its accounts were allegedly hacked into and lost a whopping RM500 million in just a few minutes.
1. JJPTR, which stands for JJ Poor to Rich, is a foreign exchange (Forex) investment and trading company founded by self-professed forex trading guru Johnson Lee in Penang, Malaysia
In Chinese, JJPTR stands for jie jiu pu tong ren (解救普通人, meaning "saving ordinary people"), claiming to help ordinary people generate passive income at a low cost through Forex trading.
Considered one of the biggest money games in the country, the company quickly rose in prominence in early 2016 among Facebook groups and investment forums in Malaysia and Singapore for promising an extremely high monthly return of investment (ROI) of 20%. They also claimed to have expanded to countries such as Australia, China, Hong Kong, and even Europe with over 120,000 members and USD95 million under their management.
2. Who is Johnson Lee?
According to a YouTube video titled 'About JJPTR Founder Johnson Lee, Johnson Lee was born in California in 1989. While he grew up in Malaysia, his parents apparently sold their house in Malaysia so they could send him and his sister to the US to study in 2009. However, the money soon ran out and Johnson - unable to secure financial aid yet refusing to return to Malaysia - started dabbling in binary options and online Forex trading.
Upon his return to Malaysia in 2014, Johnson reconnected with a friend who was a trader to form JJPTR in May 2015. By January 2016, it is said that the company had already acquired 8,000 members.
Johnson's parents are believed to be residing in Malaysia, with his father serving as an associate professor at a university in Johor Bahru.
3. How does JJPTR work?
To become a member or investor, all you have to do is open an account with JJPTR and deposit a minimum of USD50 (RM217) up to USD1,000 (RM4,347.50) into their designated bank account. Every investor is guaranteed a 20% monthly profit on their invested capital.
In addition, active members are entitled to an additional 5% commission for every new member they recruit into the scheme.
4. Alarmingly, several countries have named JJPTR on their respective watch lists
According to The Star, JJPTR is included among the 288 entities and individuals that have been entered into Bank Negara's Financial Consumer Alert list as of 24 February, meaning the company is neither authorise nor approved under the relevant laws and regulations administered by the central bank.
Singaporean trading site [Alphaplay] also stated that the company is listed under the Monetary Authority of Singapore's (MAS) Watch List, a clear sign that the company is not approved by MAS to operate as an investment firm and have not obtained the necessary license to do so. Even if they are registered as a business entity, they are operating illegally since they are soliciting investment funds.
There are also repercussions for the investors as well, as the country where the company is operating in can close them down and freeze their accounts, effectively freezing the investors' money as well. Such regulations are common in countries like USA, UK, Australia, Canada, China, Hong Kong, and the Philippines. In fact, in February, the Philippines Security and Exchange Commissions warned the public to not get involved with JJPTR or risk getting jailed.
5. How did JJPTR manage to lose RM500 million in less than a day?
After several days of remaining silent, Johnson Lee posted a video on YouTube and claimed that JJPTR's trading account was hacked into and the perpetrator managed to lose all of their money in just two minutes through trading. He also alleged that the unidentified hacker may be someone who envious of him and JJPTR.
In a separate Facebook post, Lee also apologised for the fiasco and claimed that he was unreachable for the past few days as he was trying to resolve the problem. Oddly, he also called for JJPTR members to support him and begged them not to call the police as there is still money in the account and it might lead to the company's other accounts being frozen by the authorities.
6. Lee also promised that he will come up with a "very good" new plan to save the company within the next few days. JJPTR offices have also been reopened to deal with investors' queries.
In a voice recording posted on Facebook, Lee assured his followers that he has not left Malaysia and is currently working on a new plan with his associates to recover from the losses and pay back their investors.
Chinese daily Kwong Wah Yit Poh also reported that Lee held a meeting with JJPTR members in Penang to explain the situation.
7. How are investors reacting to the fallout?
Reports from The Star indicate that while some investors are lamenting the loss of their capital, many are still hopeful of getting their money back, with some "willing to stop receiving their monthly dividends until the company gets back on its feet".
On a related note, Penang Commercial Crimes Investigation Department chief Asst Comm Abdul Ghani Ahmad revealed that no police reports have been lodged against JJPTR as of Tuesday, 25 April. MCA Public Services and Complaints Department head Datuk Seri Michael Chong also urged those who believe they have been scammed by such dubious schemes to make a police report.
Do you think JJPTR and their members will recover from this alarming situation? Let us know your thoughts in the comments section below.