Investment Fraud

7 Things You May Not Have Known About Investment Fraud – Learn More Here!

You get an email from a certain Mr. Cruise from CloudFront Systems, Inc. Surely you must have heard of CloudFront, right? Of course, you have.

In his email, Mr. Cruise seems concerned about your financial future and wants to help you out. He claims to have top-secret, inside information about cloud computing technology that will be a total game changer in the IT scene when the company releases it.

Mr. Cruise goes on to tell you that the stock is cheap at the moment and that if you don’t act now, you’ll miss out on the opportunity to make good money. The problem is, you weren’t the only one Mr. Cruise sent emails to. And even though CloudFront Systems is a real company, its stock doesn’t move quite as fast.

But when buyers rapidly buy the ‘thinly traded’ stock, the value will eventually skyrocket, and Mr. Cruise and his associates will sell their shares, plummeting the value of the stock. And just like that, your money’s gone.

While it’s easy for those of us who have learned to ignore emails from Nigerian princes selling kilos of gold, a lot of Americans lose millions of dollars each year to investment scams. A report published by the USSC (United States Sentencing Commission) found that securities and investment fraud in 2019 increased by nearly 14% since 2015.

As someone looking to secure their financial future, the possibility of getting duped will undoubtedly put you off. To help ease your concerns, we’ve created a list of seven things you may not have known about investment fraud so you can make a well-informed decision.

Let’s take a look.

1. Investment Fraud – What Exactly Is It

Investment fraud involves a purported or illegal sale of financial assets. Cases of investment fraud are sold as investments with guaranteed returns with little to no risk involved.

Investment fraudsters often target vulnerable people who they can easily swindle, such as the elderly or groups with a shared ethnicity or religion. The fraudsters tap into the weaknesses of the vulnerable or common interests within the group to build a rapport hence why they are often so successful.

2. Investment Fraudsters Work Diligently

From the outside, it might seem a bit hard to wrap your head around how fraud is so successful and why people keep sending large sums of money despite the many cases that are frequently reported on the news and social media.

What people don’t understand is that it’s usually a culmination of strategic communications that result in the victim complying with a fraudster’s request.

Usually, it begins with the offender targeting victims who fit a particular profile and tracking them both online and offline. Sometimes, the contact will be general, but the fraudster will work hard to establish trust with the victim.

The fraudster will then devise a strategy on how they’re going to present a situation that needs money from the victim without asking directly, like the case of Mr. Cruise from CloudFront Systems, as explained earlier in this article.

3. There Are Many Common Investment Scams

Investment fraud today exists in various forms, largely in part due to how interconnected we are becoming as a people. Whether you’re a seasoned investor or a newbie, you should familiarize yourself with the different types of fraud practiced today to protect your money.

Here’s a list of a few investment scams you can expect to come across:

  • Forex Scams – The forex market is perhaps the largest and most liquid financial market worldwide. But since forex trading services are conducted online, unregulated firms often take advantage of people by asking them to wire money to an offshore account to start trading or don’t invest the money as they claim to do.
  • Ponzi Schemes – Ponzi schemes lure people in with the promise of turning $10 into $50,000 in a matter of weeks. Investors who buy into the scheme often get high returns, compelling them to recruit people within their circle.
  • Cryptocurrency Scams – Some people are making good money from crypto, but it is a relatively new sector that’s largely misunderstood by many. This makes it easy for scammers to take advantage of people by posing as brokers asking people to send money so they too can own cryptocurrencies.

4. You Can Spot a Fraudster From a Mile Away

Even though con artists use increasingly effective strategies to get you to give them your money, you can identify an investment scam from a mile away if you know what to look for.

Some red flags you should watch out for include anything opportunity that promises high returns at zero risk. No investment comes without a certain degree of risk.

Also, avoid an investment firm that’s hasty in making the deal happen and is unwilling to put everything on paper. A legitimate business should lay everything out on contract and shouldn’t rush you to make a decision based on your money.

5. You Can Take Certain Measures to Avoid Being Defrauded

Fraudsters are very innovative in their practices, which means you should try your level best to make sure you don’t fall prey to their schemes.

Do your homework and find out how they claim to make money and verify if they’re registered and licensed by the relevant authorities. Talk to an investment professional who can provide high-value insight that will guide your decision-making process.

6. What To Do If You Think You Are A Victim Of An Investment Scam

Falling victim to investment fraudsters can be a confusing time. There’s the financial loss to deal with in between a painful range of emotions such as anger and frustration.

Although recovering your money will be hard to achieve, you need to report the crime as quickly as possible to bring awareness to the fraud and help relevant government agencies pursue the criminals. This way, you can help save other people’s money too.

7. A Securities Fraud Attorney Can Help

If you do end up becoming a victim of fraud or are suspecting that a firm you’re dealing with is not legitimate, the best course of action is to hire a securities fraud attorney.

A securities fraud attorney can help identify common signs of fraud and will tell you if your money is being mismanaged. The attorney will also help you file a lawsuit against the investment firm if there was a breach of fiduciary duty or they purposely omitted certain facts.

All in all, a securities fraud attorney will shed light on more facts that you might not have known about investment fraud, so make sure you the right one at the right time.

About Ambika Taylor

Myself Ambika Taylor. I am admin of For any business query, you can contact me at [email protected]