Top 10 Securities Scams

Last updated: November 13, 2015

Watch Out for These Scams!

Ponzi Schemes

Similar to pyramid schemes, the premise is simple: pay early investors with money raised from later investors. The only people who make money are the promoters who set the Ponzi in motion.

Unlicensed Individuals Selling Securities

Red Alert! Don't invest with securities sellers who are either not registered or not listed as exempt. Remember: No registration or exemption= no sale. Check to see if the individual is properly licensed.

Unregistered Investment Products

Some fraudsters just completely bypass the state registration requirements. They usually promise securities with “limited or no risk” and high returns. Always check to see if investment products are registered with your state or federal regulators.

Promissory Notes

Empty promises can leave these notes worth less than the paper that they are printed on.

Senior Investment Fraud

Seniors have a lifetime of savings. Hence, seniors continue to face high volumes of investment fraud by con artists. These con artists peddle unsecured promissory notes, fraudulent investments, or securities unsuitable for seniors. They may also offer sketchy viatical settlements. These are the purchases of life insurance or other policies for cash

High-Yield Investment Schemes

Con artists lure investors with promises of triple-digit returns. They claim to have access to “risk-free guaranteed high-yield instruments” or something equally deceptive. If it sounds too good to be true, it probably is!

Internet Fraud

Stock promoters use online “boiler rooms,” instant messages, and fake websites on the internet. These are lures into “pump-and-dump” stock schemes. These stocks become artificially inflated through high-pressure sales tactics. Insiders then sell off their shares at the higher prices and make big profits. Finally, other investors watch the price of the stock drop.

Affinity Fraud

This type of fraud involves con artists targeting religious, ethnic, cultural, and professional groups. They gain the trust of people by presenting themselves as part of the same group. In reality, however, they are there to defraud their new "friends".

Precious Metals (Gold, silver, etc.)

In these schemes, sellers offer to keep purchased gold or other precious metals in a ‘secure vault’. They then promise to sell the precious metal for the investor when it gains in value. Often, the precious metal does not actually exist. Similar schemes involve promoters pitching investment pools in precious metal commodities and mines.

Oil and Gas Scams

Con artists take advantage of the fluctuating oil market. Regulators warn that these cons may promise quick profits in oil and gas ventures.

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