In today’s economy one of the greatest fears that people have is to be taken advantage of and losing all of the money they have invested. There are new and potential investors entering the stock market every day and no one goes out of their way to be a fraud victim, but we can learn from past fraud victims as a way of protecting ourselves in the future. When dealing with potential fraud it is in the best interest of the investor to have the information of a good stock fraud attorney while you are investing.
- Boiler Room Scam
If you are a person who is seeking to enter the stock market as a way to tighten up your investment strategy it is only natural that your seek out option online. The person in the boiler room scam may state that they company that they are promoting is currently private but you are getting an exclusive offer to get in on the ground floor for an initial public offering (IPO). Once you are convinced, then they ask you to wire money to a specific account with the promise that you will receive stock certificates once the company goes public. Later you will discover that your investment does not exist. We can learn from this by always asking to see a stock broker in person and ask for credentials that verify identity.
- Forex scams
A Forex scam is a case of people investing into items that they don’t truly understand. A forex market means that a person is investing in foreign exchange. Profits and losses with this type of market is dependent on the fluctuations in the rate of exchange between the two different currencies. Once investors invest in this scam often you will not hear from the fraudsters again. If you are considering investing in a forex complete all of your homework so you understand what would make this market fluctuate and always invest with a stock broker who has proven credentials.
- “Pump and Dump”
This is a fraud scheme that is designed to promote one specific stock, sometimes a penny stock to pump up the price of the stock. Then once the fraudster has enough people invested in the stock and the price is inflated enough then he/she pulls their money out of the stock making a profit and leaving the victims with a worthless stock. If a stock is being traded in the United States, they are required to report financial information to the Securities and Exchange Commission. Do your homework to ensure that the financials that a company has is strong before you invest. And also talk to a stock fraud attorney for further information on how to recover after an incident like this.
- Offshore Investments
Scheme promoters do their best to move your money offshore in order to avoid detection from local governing parties. Often the promoters will want you to invest in something that has been in the media recently and you will need to move your money offshore in order to take advantage of this promotion. Once the money has move through several different borders the fraud victims will not hear from the promoters again. Keep full control over your money and read all paperwork before you sign, some fine print will allow stock brokers to move money around without expressed permission.
- High-Yield Investment Programs (HYIP)
Often these HYIPs are only online and they will state that they have extremely high rates of return but will be vague on how money that you invest will actually be invested. Promoters of this scam will have positive word-of-month marketing through social media or other websites. When you decide to invest you will be asked to either wire money or use an online payment system. Again, before you invest try to gather as much information about the service as possible, and only invest with those companies that has a history that you can track.