Four of the Latest Schemes Investors Need to Watch Out For
Many people who are approaching what was supposed to be the golden years
have been left scrambling to try and bulk up their retirement savings.
As nest eggs have dwindled and interest rates have remained low, some
investors are finding themselves victimized by fraud.
Scam artists target people of all ages, but according to the Northern
American Securities Administrators Association, nearly 50 percent of investor
complaints have to do with
investment fraud targeting people age 60 and older. There are some precautions that you
can take to minimize your chance of financial loss from an investment
scam. One of the first steps is becoming aware of the latest schemes.
Below are some of the most current types of investment fraud, which were
The Wall Street Journal:
Life Settlement Securities: Life settlements are defined as a financial transaction in which the policy
owner sells his or her policy to an investor at a discount to face value.
These transactions have already been under heavy scrutiny, as there are
high fees and aggressive sales tactics often used. A new problem has arisen
though. Some companies are “securitizing” the life settlements,
by packaging them together and using them to back the sale of notes. There
is tremendous concern among regulators that these policies are being overvalued.
Home Equity: Not everyone is upside down on their properties, meaning they don’t
owe more than the house is worth. Some homeowners still have a considerable
amount of equity and have therefore become a target of scam artists. There
have been reports of homeowners who have been persuaded to borrow money
against their homes that is then lent to limited liability companies or
partnerships. They are offered steady returns, but unfortunately many
end up losing their money.
Alternative Energy: Alternative energy has become a popular investment category, as there is
a big demand for “green” products and technology. While there
are legitimate alternative energy investments available, there are also
a lot of scams and it can be difficult to decipher between the two.
Precious Metals: Investing in gold has gotten a lot of hype. There are newspaper ads and
billboards boasting how investors can make money by purchasing gold. Scams
have been reported where companies offer to purchase gold and store it
for investors, only to find out later that the gold didn’t exist
in the first place.
You can reduce the chances of becoming a victim of an investment scam by
doing your homework. The Financial Industry Regulatory Authority offers
a service known as
BrokerCheck that allows you to pull up records of any brokers you are considering
working with. You can also check with your state securities regulator
to see if any actions have been made against a broker.
If you believe that you have lost money due to investment fraud, a
securities fraud attorney from Meyer Wilson may be able to help you. Call us today or fill out our