Homepage

Markets & Stocks
    SAVE   |   EMAIL   |   PRINT   |   RSS  
Top investment scams
Investor protection group releases survey of most common scams being used to fleece investors.
March 25, 2005: 8:29 AM EST
INVESTOR RESEARCH CENTER INVESTOR RESEARCH CENTER upgrades & downgrades earnings & warnings public offerings INVESTOR RESEARCH CENTER INVESTOR RESEARCH CENTER
Top 10 Investor Pitfalls
Scams to avoid if you want to keep your money safe.
HeadingHeading
1Ponzi (pyramid) schemes
2Unlicensed securities dealers
3Unregistered investment products
4Promissory notes
5Investment scams that target senior citizens
6Sky high-yield investments
7Internet fraud
8Schemes that target a race, religion or ethnic group
9Variable annuity sales
10Oil & gas scams
Source:North American Securities Administrators Association

NEW YORK (CNN/Money) - In investing, as in life, if it sounds too good to be true, it probably is.

Nowhere is that more clear than with the latest list of scams used to fleece investors, released Thursday by the North American Securities Administrators Association (NASAA).

Ponzi schemes were No. 1 on the list, which was ranked by prevalence and seriousness.

Named for swindler Charles Ponzi, the plans are pyramid schemes that promise to use money from later investors to pay early ones. After the plans collapse, the people who make most of the money are the promoters who set the plan in motion.

Rounding out the top five were investments pushed by unlicensed securities dealers; unregistered investment products; promissory notes; and investment scams that target senior citizens and their life savings.

Internet fraud appeared in the top 10, as well as oil and gas scams.

With oil prices at record highs, regulators warn that con artists will probably dust off old oil ventures, and sell shares in non-existent oil fields and unproven technologies designed to convert common substances into fuel.

While not technically scams, penny stocks, so-called private placements and investment seminars were given "dishonorable" mention.

Investors should contact state regulators with any questions about an investment product, broker or adviser before making an investment, Franklin Widmann, NASAA president and chief of the New Jersey Bureau of Securities, said in a statement.

"One phone call can save a lot of money and heartache," he said.

For more information on how to contact regulators from NASAA's Web site, click here.

For more on personal finance, click here.  Top of page

graphic


YOUR E-MAIL ALERTS
Fraud
Investing
Mutual Funds
Financial Markets
Manage alerts | What is this?