How Can I Tell if a Company Offering an Investment is Operating a Ponzi Scheme?

As securities fraud attorneys, we believe we can safely say that the Ponzi scheme can be one of the most difficult types of investment fraud to spot. Even experienced investors are sometimes taken in by unscrupulous brokers, advisors, and others who carefully charm and lie to investors to lure them in. In retrospect, many investors can see the warning signs and red flags that they had initially missed, and we believe it's important for any investor to know how to look into an investment opportunity. One very important aspect of researching an investment opportunity is to look carefully at the company that is offering it.

What Kinds of Signs Point to a Company that is Offering Fraudulent Investments?
If you look at our site often, you already know that you should check into your broker's background and carefully review all documentation related to a potential investment before you buy. To help protect yourself from Ponzi schemes, also take the extra time to look carefully into the investment that your broker is promoting, and watch out for the following warning signs of a fishy situation:

• The address is just a post office box, or the location does not seem to contain a business.
• The entity has no employees other than your contact.
• When you check into the background of important people in the entity, those backgrounds don't match the types of opportunities they offer.
• The entity does not appear to have any history of actual, successful investment activity.
• The entity only offers investments that are based on a current event, new technology, or other recent announcement.
• The entity touts a much more successful history than other companies in the same line of work.
• You are unable to find information about the entity, or you otherwise can't figure out if the entity is actually legit.
• The contacts you speak with seem to make complicated excuses about why you are unable to find any of the information about the entity that you need.

Despite careful research, many investors are lured into investment scams and Ponzi schemes every year. If you have personally suffered losses due to investment fraud, speak with one of our experienced securities fraud attorneys today at 1-866-8-BROKER (1-866-827-6537) in a completely free, no obligation consultation. Our FINRA lawyers have represented hundreds of investors nationwide in stockbroker mediation, arbitration, and litigation in an effort to recover their losses.

For further information, don't forget to request your completely free copy of David P. Meyer's important book Five Signs of Investment Fraud ...And What to Do if it's Happened to You.