In a small conference room in a Marriott hotel, adjacent to Canary Wharf in Londons Docklands, 11 aspiring currency traders sit engrossed, listening to a man who claims to possess the secret of obtaining unlimited riches.
I promise you, guys: as long as you follow what I do, youre going to make money. Its very difficult not to make money, says the presenter, Gurdas Singh, of a coaching firm called Knowledge to Action. Trust me: when you start trading, your family members will be giving you money to start trading for them. At the end of the day, banks are giving you nothing. Dont put anything into an Isa – its a waste of time.
Singhs pitch is enhanced by the impressive claim that Prince William plays for the companys polo team plus a glitzy promotional video featuring a booming voiceover akin to those on Hollywood movie trailers.
The films narrator introduces Knowledge to Actions owner, internationally acclaimed wealth creation expert Greg Secker, before floating a stunning opportunity: With over $4tn being traded daily, the greatest opportunity in the history of mankind is here for the taking.
It is hard not to be at least slightly impressed, and many of the Marriott attendees appear interested in paying almost £2,500 to enrol on the introductory course. But outside the meeting room, a more intriguing story emerges.
Knowledge to Action Holdings is controlled by Secker, whom the companys website introduces as a keen polo player, father to Santiago, philanthropist and founder of the Knowledge to Action foundation [who] lives in London with his gorgeous girlfriend Katherine Scott.
The companys accounts show that its top-paid director – almost certainly Secker – received £2.2m in 2009 as the group made profits of £738,194, and £1.6m in 2010, when the company made a loss of £1m, as its growth allowed it to invest in a new Australian subsidiary.
The marketing materials continue in a familiarly confident vein: Using the very same trading strategies discovered on his travels around international trading floors, Gregs personal trading account grew to such an extent that he decided to leave the investment banking world. Already a wealthy man, Greg retired as a vice-president of Mellon Financial Corporation at the age of 27 to set up a trading floor from home.
That picture is enhanced by the websites in the press section, where links to articles about Secker and his company include one interview in which he tells a financial website about his time running trading floors. It combines to create an impression that might lead some to assume that Secker was a trader at Mellon (now Bank of New York Mellon). Was he?
After repeated unanswered questions asking who Secker had traded for, Knowledge to Action issued a statement. It said: Mr Seckers background is set out clearly on Knowledge to Actions website. There is no assertion that Mr Secker was a trader at BNY Mellon and Mr Secker makes no such claim.
Still, Secker did work for Mellon, so it is conceivable that he learned from traders and used the lessons to teach others.
Knowledge to Actions website boasts numerous glowing testimonials, including one from Leslie Leung (or Lang – two spellings are given on the site), a former interior designer. I started learning forex [foreign exchange trading] while I was working, she says. When I felt I was confident enough I decided to resign from work and trade full time … I would definitely recommend this course to people. Its a fantastic learning environment.
There are plenty more along similar lines and there appear to be situations where traders risk Knowledge to Action funds. The site adds: [Secker] personally owns one of the highest performing private trading floors (Live Trading Floor Ltd) which employs full-time traders using the very same strategies Greg learned on his travels around the trading floors of the world. But that suggests an obvious question: how is the business ranked as highest performing?
The most recent accounts at Companies House show Live Trading Floor is wholly owned by Seckers Knowledge to Action Holdings. The subsidiary had net assets of just £91,132 on 31 December 2010 and made a loss during the year of £97,132. Furthermore, the holding companys accounts for the year ending 31 December 2010, which were approved in September 2011, state: Live Trading Floor Limited did not undertake any trading activity during the year under review.
That does not quite chime with Singhs pitch to potential clients at the seminar: If it is easy to learn how to trade for £7.99 from a book bought at WH Smith, dont you think everybody would be doing it? he asked. Youve got to be on a pro trading floor, or come onto our pro trading floor.
Despite a response from Knowledge to Action, it is still not clear how Live Trading Floor is classed as highest performing. The company said: The trading performance is resident in the traders tax-free personal accounts [and] trounces the performance of the hedge fund index. [It] should not be shown in the [Live Trading Floor] accounts.
This apparent reticence to discuss specifics about Seckers trading credentials rings a bell with some ex-employees, who suggest that his true talent is in selling. One told the Observer: Knowledge to Action is a sales organisation [but] thankfully the majority of people who attend a free seminar are wary of the repeated promises of unlimited wealth for little investment and almost no work, and are finally scared off by the timeshare-style sales pitch at the end.
Unfortunately, for every seminar run, about 10% of people are not perturbed. Given the scale of the marketing and the high number of free seminars being run across the UK, a lot of people from varying demographics end up paying over £2,000 for a course that may not make them any money and will almost definitely not make them the kind of vast income sold to them at the free seminars.
That disappointment has led to numerous negative reviews of the courses being posted online. However, other ex-employees insist the taught content is good, but that presenters occasionally hugely exaggerate the ease with which delegates will be able to make large profits. They also say that the crucial coaching element is often neglected in favour of attempting to sell further courses, such as Momentum Coaching at £2,220 or Master Trader at £6,596.
Kerry Twite, who paid £2,396.40 for a Traders University course last year, said: The course explained the basics of trading and gave me – a complete beginner – a couple of basic trading strategies that I could start to use straight away. On the forums, my sense was that the source of much of the negative criticism was mostly disgruntled get-rich-quick types who had attended the course looking for the holy grail of trading. The truth is that there is no holy grail.
Where you could criticise is that the up-selling is a bit obvious and heavy-handed at times. And you did get the sense that some of the claims made with regards to capital growth, sports cars and so on may be over-exaggerated.
Knowledge to Action did provide a long list of customer testimonials, giving weight to its point that there are many people who have found the courses valuable and claim to be trading profitably, while it said it neither promises nor guarantees success.
The company added: Around 100,000 individuals have attended courses run by Knowledge to Action around the world. The vast majority have enjoyed the courses and found them to be highly professional, informative and good value for money. We have had a small number of attendees who discovered that trading was not for them and therefore subsequently criticised the training.
This unfortunately is inevitable when the numbers are so large. We have developed a strong brand with many thousands of satisfied clients and will take legal action to defend our reputation vigorously if so required.
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