By: Jack WaymirecloseAuthor: Jack Waymire Name: Jack Waymire
Email: jack@paladinregistry.com
Site: http://paladinregistry.com
About: Jack writes for the InvestorWatchdog website and Worth magazine. He worked in the financial services industry from 1976 to 2004. For twenty of those years he was the president of a Registered Investment Advisory firm and a Broker/Dealer. Jack is the author of Who's Watching Your Money? The 17 Paladin Principles for Selecting a Financial Advisor and is a co-founder of PaladinRegistry.com.See Authors Posts (87) | November 17, 2009 | Deceptive Sales Practices, Illegal Schemes & Scams

The SEC charged two companies, including a financial planning firm, with conning senior citizens out of their retirement money when they made extraordinary claims about investing in a biotech startup.

According to the SEC complaint, advisory firm Speed of Wealth convinced more than 300 investors, many of them seniors, to liquidate their pension plans and invest all of the money in Mantria, a biotech start-up. The complaint also alleges Speed of Wealth principals, Wayde and Donna McKelvey boasted about Mantria’s eco-friendly products and the opportunity to invest in a “carbon negative” housing community in Tennessee.

Sophisticated scam artists need something that is “sexier” than just returns to convince investors to liquidate their assets and turn the proceeds over to them. Almost all scams promise exceptional returns. This scam promised returns in the hundreds of percent. But, that may not have been enough to convince people to part with their savings. So they added the sizzle of a “unique investment opportunity” in a green company that they said was a world leading producer of an environmentally friendly product. The appeal of this alleged scam went way up when the principals combined high returns with a green product company. Plus, getting in early on a new, unique green product investment opportunity made the scam even more marketable.

The high returns should have warned investors that this investment may be a scam. Then there was the company they had never heard of and the product they didn’t understand. This was a sophisticated scam because it had a lot of manufactured appeal.

When your money is involved, if it sounds too good to be true it is not true. Contact FINRA, the SEC, and your state’s securities commissioner. Do not invest until they have confirmed the legitimacy of the investment and the company that is marketing the investment to you.