Recovering Losses caused by Investment Misconduct

Stay Away from Promissory Notes

Investment schemes involving promissory note fraud are on the rise in states across the nation. Just last month, the SEC filed a civil action against three defendants in Utah who were accused of scamming more than 120 investors in a $27.5 million Ponzi scheme that involved the issuance of fraudulent promissory notes.

A promissory note is basically a loan between an investor and a company. The investor agrees to loan the company a certain amount of money for a particular period of time, and the company promises to pay a fixed return on the investment, usually the principal plus interest. While legitimate investment opportunities involving promissory notes do exist, it is unlikely that you'll ever hear of one.

The SEC highlights this point on its website: "Bear in mind that legitimate corporate promissory notes are not usually sold to the general public. Instead, they tend to be sold privately to sophisticated buyers who do their own ‘due diligence' or research on the company. If someone calls you up or knocks on your door trying to sell you a promissory note, chances are you're dealing with a scam."

While many investors are swayed by the promise of a high, fixed-rate return with little risk, the reality is that the vast majority of promissory note offerings marketed to individual investors are scams. As such, the best advice when dealing with promissory notes is to simply stay away. Remember, safe is typically better than sorry.

About our law firm:

The law firm of David P. Meyer & Associates represents individuals across the country who have been harmed by investment fraud. All of our cases are handled on a contingency fee basis and we never request a retainer of any kind. Contact us toll-free at 1.866.429.2360 for more information or complete the online form on the top of this page and we will respond promptly.