Famed bank robber Willie Sutton is often quoted as saying he targeted banks because that's where the money was. Well, today, unscrupulous brokers are following in Willie's footsteps by focusing on the growing $1.5 trillion foreign exchange (Forex) market for the same reason. It's about 50 times bigger than the stock market.

 As investors become disillusioned by the poor returns from stocks and other securities, more and more are turning to the Forex market where currency values rise and fall in the blink of an eye, and the lure of easy money becomes too hard to resist.

 Scams in the forex market are typically committed by brokers who make promises of guaranteed high returns and quick turnarounds. And it's becoming a global problem.

 Federal officials charged a pair of Boston-area currency traders this week with scamming investors out of more than $30 million. Meanwhile, nine lenders in Asia, including the Bank of East Asia and the so-called "Big Four" mainland banks, have been fined for illegal foreign exchange transactions.

 The case in Boston alleges the two founders of the Boston Trading and Research Company, LLC had raised $40 million from 750 investors, but then used the money on operating expenses, luxury SUVs and entertainment, including a Florida home. The money was meant to be invested in a foreign currency trading venture, which allegedly promised customers it would put a cap on any losses. Instead, trades had actually lost 90% of the customers' money.

 That's just one way forex brokers cheat traders. The situation in Asia involves large banks and is still unfolding. But it appears the banks being investigated allegedly breached a number of banking rules, but authorities were not giving out details. Apparently the investigation has been going on for nine months and involved 197 cases totaling more than $7.34 billion.

 Aggressive marketing

The primary tool being used today by forex brokers is some very aggressive and misleading marketing. It's designed to lure investors with promotional offers on the Internet, television and in newspapers. The victims are usually new to the forex market and don't understand the complexities.

 Author's message: Remember investing rule number one. If you don't understand how an investment works don't invest in it.

 Many forex scammers will claim to offer you a hot new currency trading strategy that has "no financial risk" and is designed to "beat the market." That should trigger an alarm bell. If it has no risk, then it doesn't exist. It's a fraud. All financial transactions have a certain amount of risk.

 So who's watching out for these crooks? There are government agencies set up to regulate Forex brokers such as the National Futures Association (NFA) or the U.S. Commodity Futures Trading Commission (CFTC).

 If you're still game to play in this highly volatile market, you can check to make sure a forex broker is actually registered with the NFA or the CFTC because even the phony ones will claim to be registered when they're actually not.

 Another way to weed out the thieves is to go through the various contract terms and conditions that are proposed to you. Some forex brokers will offer a guarantee of large returns on your investment. If the word "guarantee" pops up in the conversation get as far away from these thieves as possible.