Illegal Schemes & Scams Category
Bad advice damages investors, but it is not illegal. That is why it is so common. Then there are illegal scams, the most prominent being Ponzi schemes. These scams may be sold by unlicensed people who have nothing to do with the financial services industry. It pays to make sure you are talking to a licensed professional who has a clean compliance record.
By: Jack Waymire | August 24, 2009 | Illegal Schemes & Scams, Ponzi Schemes
Gary Hutcheson pleaded guilty to operating a Ponzi scheme in Macon, Georgia. He and an accomplice defrauded 50 investors, including prominent doctors, attorneys and church members, of millions of dollars when he told them their assets would be invested in a hedge fund named Georgia Ionics Fund, LLC.
Some of the investors knew Hutcheson 30 years [...]
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By: Jack Waymire | August 21, 2009 | Illegal Schemes & Scams
Colin Nathanson, an Orange County, California resident was sentenced to 27 years in federal prison for swindling 2,500 investors out of $28,000,000 and perhaps as much as $55,000,000.
He told investors their assets would be deposited in an Investment Trust he controlled and the money would be used to purchase an equity interest in a private Internet-based technology [...]
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By: Jack Waymire | August 3, 2009 | Illegal Schemes & Scams
Another blog site asked the question, who were the most frequent victims of investment schemes and scams? The surprising answer came from the investor education professionals at FINRA, the financial service industry’s self regulatory agency.
The most frequent victims are male, age 55 to 65, college educated, financially literate, and active investors who have self-directed accounts. It is not [...]
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By: Jack Waymire | July 30, 2009 | Illegal Schemes & Scams, Investor Information
Ponzi schemes and other investment scams share four common characteristics. Know the characteristics and you can avoid most schemes and scams. You can also warn friends, family, and associates so they can avoid them.
The Sales Pitch
Every scam has a sales pitch that tells investors what they want to hear. For example, "We have a unique investment [...]
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By: Evor Vattuone | July 29, 2009 | Illegal Schemes & Scams, Ponzi Schemes, Who Can I Trust?
The Affinity Group
Alarming numbers of new scams are being originated from what are called “affinity groups”. These are groups of people with similar values, lifestyles and/or ethnic identities, such as churches and women’s or senior groups. Predators use the most respected members of affinity groups to gain access to their constituents – and their built-in [...]
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By: Matthew Arndt, CFA, CPA, CFP | July 10, 2009 | Conflicts of Interest, Deceptive Sales Practices, Illegal Schemes & Scams
Ameriprise’s agreement to pay $17.3 million to settle charges that it received millions of dollars in undisclosed “incentive” payments to sell certain REITs to its brokerage customers is an example of how potent enticements like large sales commissions can lead to deplorable acts that harm investors. Ameriprise received about $30.8 million in payments related to [...]
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