Awareness & Prevention Tips

 

 

Securities Fraud

A Basic Overview

The nation's economy is increasingly dependent on the success and integrity of the securities and commodities markets.  As a result, the FBI diligently investigates criminal activity in the markets and against investors whenever it arises.

 

Definition

The term Securities Fraud covers a wide range of illegal activities, all of which involve the deception of investors or the manipulation of financial markets

 The Top Schemes

• High Yield Investment Fraud

  • Ponzi Schemes

  • Pyramid Schemes

• Advanced Fee Schemes

• Foreign Currency Fraud

• Broker Embezzlement

• Hedge Fund Related Fraud

• Late Day Trading

 

Common Scams

Be on the Lookout for Fraud

 High Yield Investment Frauds

• Characterized by promises of high rates of return with little or no risk.

• May involve various forms of investments (e.g. securities, commodities, real estate, precious metals, etc.)

• “Too good to be true” investment opportunities.

• Perpetrators may contact victims by telephone, email or in person.

• The offers are generally unsolicited.

 

Ponzi & Pyramid Schemes

• Use money collected from new victims to pay the high rates of return promised to earlier investors. 

• Payouts give the impression of a legitimate, money-making enterprise behind the fraudster's story.

• In reality, investors are the only source of funding.         

 Advance Fee Schemes

• Victims advance relatively small sums of money in the hope of realizing much larger gains. 

• Gains never materialize because there is no legitimate underlying investment. 

• To participate a particular investment opportunity, victims must first send funds to cover “taxes” or “processing fees.”

• After victims send the “fees,” the perpetrators appropriate the funds and never deliver on the investment.

 

 

Protect Yourself

How You Can Avoid Becoming a Victim

 Identify the warning signs

• Does the offer sound too good to be true?

• Is the seller using high pressure sales tactics?

• Was the investment offer unsolicited?

• Did the seller ask for information that is usually considered personal (e.g. social security number, credit card information, etc.) over the phone or internet?

If you answer “yes” to any of the above questions when considering an investment opportunity, you may be the target of a scam artist.

 Take action to avoid fraud

• Don’t believe everything you are told by the seller.  Take the time to do your own research on the investment’s potential.

• Don’t assume the solicitor is who he or she claims to be.

• Check with federal and state securities regulators to find out if there have been any complaints against the company.

• Ask the promoter whether – and how much – he or she has been paid to tout the opportunity.

• Ask where the company is incorporated and then call that state to ensure that the company has a current annual report on file.

• Request written financial information, such as a prospectus, annual report, offering circular or financial statements, then compare the written information to what you were told.

• Get offers in writing and save a copy for your records.

• Check with a trusted financial advisor, your broker or an attorney about any investments you are considering.  

Report scams when they occur

• Don’t be embarrassed.

• File a complaint with the Securities and Exchange Commission, state securities regulator or a law enforcement agency.

• Report the crime promptly—you’ll have a better chance of getting your money back if you do.

 

Statistical Accomplishments

Securities and Commodities Fraud

 

 

 

OFFICE	PHONE #	OFFICE	PHONE #
Albany, NY	518-465-7551	Memphis, TN	901-747-4300
Albuquerque, NM	505-889-1300	Miami, FL	305-944-9101
Anchorage, AK	907-276-4441	Milwaukee, WI	414-276-4684
Atlanta, GA	404-679-9000	Minneapolis, MN	612-376-3200
Baltimore, MD	410-265-8080	Mobile, AL	251-438-3674
Birmingham, AL	205-326-6166	Newark, NJ	973-792-3000
Boston, MA	617-742-5533	New Haven, CT	203-777-6311
Buffalo, NY	716-856-7800	New Orleans, LA	504-816-3000
Charlotte, NC	704-377-9200	New York, NY	212-384-1000
Chicago, IL	312-421-6700	Norfolk, VA	757-455-0100
Cincinnati, OH	513-421-4310	Oklahoma City, OK	405-290-7770
Cleveland, OK	216-522-1400	Omaha, NE	402-493-8688
Columbia, SC	803-551-4200	Philadelphia, PA	215-418-4000
Dallas, TX	972-559-5000	Phoenix, AZ	602-279-5511
Denver, CO	303-629-7171	Pittsburgh, PA	412-432-4000
Detroit, MI	313-965-2323	Portland, OR	503-224-4181
El Paso, TX	915-832-5000	Richmond, VA	804-261-1044
Honolulu, HI	808-566-4300	Sacramento, CA	916-481-9110
Houston, TX	713-693-5000	Salt Lake City, UT	801-579-1400
Indianapolis, IN	317-639-3301	San Antonio, TX	210-225-6741
Jackson, MS	601-948-5000	San Diego, CA	858-565-1255
Jacksonville, FL	904-721-1211	San Francisco, CA	415-553-7400
Kansas City, MO	816-512-8200	San Juan, PR	787-754-6000
Knoxville, TN	865-544-0751	Seattle, WA	206-622-0460
Las Vegas, NV	702-385-1281	Springfield, IL	217-522-9675
Little Rock, AR	501-221-9100	St. Louis, MO	314-589-2500
Los Angeles, CA	310-477-6565	Tampa, FL	813-253-1000
Louisville, KY	502-583-3941	Washington, DC	202-278-2000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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