Thursday, February 26, 2009

FINRA Issues Investor Fraud Alert Warning

The Financial Industry Regulatory Authority, commonly known as FINRA, issued an Investor Alert, warning of a variety of investment fraud schemes, including Ponzi schemes, pyramid schemes, "pump and dump" scams, advance fee frauds, and offshore investment frauds. The alert describes a number of psychological approaches investment fraudsters commonly use as well as outlining some of the "red flags" to watch out for. These include:
  • guarantees of returns
  • unregistered products
  • overly consistent returns
  • complex strategies
  • missing documentation
  • account discrepancies
  • pushy salesmen

Read the whole alert here.

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