Don’t be a victim of an investment scam. It is easier than you think for
crooks to con you out of your hard earned money if you let your guard
down.
Investment scams come in many forms and the Internet has just made it
easier and faster for these vultures to feed on investors tempted by the
possibility of an “inside deal.”
The people who run these scams range from the very crude and clumsy to
the highly polished and sophisticated who wrap their con games in such
an air of legitimacy it may be hard to see the truth.
The Scams
What do these scams look like? There are many different types floating around the Internet, so it would be impossible to identify them all – besides a new one will pop up tomorrow. However, there are some signs you can look for:- Someone you don’t know promises you an “inside” deal. Why would a stranger pick you out to make rich? Does that make any sense?
- You are offered a can’t miss trading system guaranteed (or your money back) to make you rich. There is no such system – and if there were, why would anyone want to sell it?
- There are no secrets, no passwords, no unrevealed whatever. Don’t pay for anything like this.
- Someone has a very complicated scheme involving offshore bank financing or gemstones or oil leases in Uzbekistan to make you rich. Why get involved in a complicated scheme you don’t understand (there’s a reason you don’t understand it – it’s designed that way), when there are plenty of opportunities that are legal and you can understand.
Popular Scam
One of the most popular stock schemes is called “pump and dump.” Here’s how it works.
A group of crooks buys up a block of stock in a little know company,
preferably one that has a semi-exciting technology name. They get on the
Internet and begin flooding cyberspace with false rumors about how this
company has some breakthrough technology or just signed a super deal.
They may even develop phony letterhead and send out press releases about
the company. In some cases, the company knows nothing about the scheme.
It becomes a victim too. In other cases, company insiders execute the
scheme.
If the crooks are successful, the stock’s price will jump as they
convince people they are getting in on the ground floor of some big
deal.
After the stock goes up, the crooks decide when they think it has gone
as far as it will go and then they sell their big block of stock for a
fat profit. When they sell, the price drops and all the people they
conned into buying lose money.
A variation of this scheme is for the investors to short a stock then
hop on the Internet and spread lies about how the company is in trouble
or about to face some criminal proceeding. When the stock drops, the
short sellers cover their positions for a big profit.
Conclusion
Schemes come in many forms to separate you from your money. They all
have one thing in common: very high returns. The sad truth is that many
people fall for these schemes because their greed overcomes their
reason. Don’t let this happen to you.
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