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Investment & Ponzi Fraud Schemes that put false information about stocks or investment opportunities online to drive up the price of thinly traded securities, or online investment newsletters that recommend stock picks that are not good investments for anyone. Investment Fraud: About 7.3 million elderly have been victimized Americans have lost over $40 Billion to fraud Don’t believe claims that there is no risk Beware of promises you will make money fast Don’t agree to anything on the spot Check with at least two advisors first Stay away from offshore investments Don’t act on testimonials from strangers Call your state security regulator
Mask of Bernie Madoff for Halloween
There are thousands of tricksters like Bernie Madoff. Buyer beware!
Protecting Yourself from Investment Fraud Beware of Red Flags of Fraud: Guarantees: Be suspect of anyone who guarantees that an investment will perform a certain way. All investments carry some degree of risk. Unregistered products: Many investment scams involve unlicensed individuals selling unregistered securities—ranging from stocks, bonds, notes, hedge funds, oil or gas deals, or fictitious instruments, such as prime bank investments. Overly consistent returns: Any investment that consistently goes up month after month—or that provides remarkably steady returns regardless of market conditions—should raise suspicions, especially during turbulent times. Even the most stable investments can experience hiccups once in a while. Complex strategies: Avoid anyone who credits a highly complex investing technique for unusual success. Legitimate professionals should be able to explain clearly what they are doing. It is critical that you understand any investment you’re seriously considering—including what it is, what the risks are and how the investment makes money. Missing documentation: If someone tries to sell you a security with no documentation—that is, no prospectus in the case of a stock or mutual fund, and no offering circular in the case of a bond—he or she may be selling unregistered securities. The same is true of stocks without stock symbols. Account discrepancies: Unauthorized trades, missing funds or other problems with your account statements could be the result of a genuine error—or they could indicate churning or fraud. Keep an eye on your account statements to make sure account activity is consistent with your instructions, and be sure you know who holds your assets. For instance, is the investment adviser also the custodian of your assets? Or is there an independent third-party custodian? It can be easier for fraud to occur if an adviser is also the custodian of the assets and keeper of the accounts. A pushy salesperson: No reputable investment professional should push you to make an immediate decision about an investment, or tell you that you’ve got to “act now.” If someone pressures you to decide on a stock sale or purchase, steer clear. Even if no fraud is taking place, this type of pressuring is inappropriate.If the deal seems too good to be true, it probably is. If you have an offer of assignment or to rent or lease a U.S. Treasury security for a certain period, it is, in all likelihood, bogus. Here are some ways to check the validity of offered securities, and how to protect yourself: Be especially wary of securities offered for assignment or offered as proof of financial stability that bear the CUSIP number of 912810BU1. Demand that the offeror produce the securities or evidence of ownership. If they can't, you should not consider the offer genuine. Demand a statement from the financial institution holding book-entry securities. The statement should be sent to you directly. Question the validity of any securities and information furnished to you with a trusted and informed source, such as your broker, accountant, or lawyer.  Remember people trusted Bernie Madoff completely, and talked their friends into investing with him. Confirm that the certifying or holding organization is legitimate, still in business, and how long it has been in business. Call the organization for specifics on the purported existence of the securities. Ask if the person offering the investment is registered with the SEC or with the securities agency in the state or country where you live. Do not assume that people or organizations are who they say they are.
Online Fraud
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