How Can I Find Out Whether an Investment Seminar Is Legitimate?
You receive a letter in the mail, or perhaps spot an ad in your morning
paper, offering free information on an unbelievable investment. Be careful!
Fraud comes under a lot of guises, but one of the most popular ways to
reel in unsuspecting investors is through these seminars.
How Does Investment Seminar Fraud Work?
Although some investment seminars are legitimate, any seminar that promises
an opportunity that is easy, requires little money down, and “guarantees”
high returns should make you pause. These types of investment scams entice
people in with a free seminar offering beginning investment advice and
maybe a free dinner or prizes.
When you get there, though:
- There are extra fees, additional “exclusive” seminars, or special
software to be purchased
- You are pressured to buy now, or miss out
- You’re offered a suspicious loan to get you started and cover the
cost of the next seminar
- The investment seminar advertises a fantastic-sounding investment, but
when the time comes to buy, you’re offered something completely different
Where Does It Go Wrong?
At this point, you probably get the feeling something “fishy”
is going on, but where does that money actually go? If you run into the
“red flags” above, there’s a good chance your hard-earned
cash is actually going into one of the following forms of investment fraud:
Ponzi Schemes. The fraudster uses the money taken in from expensive seminars to pay
off investors, giving the appearance of legitimacy.
Promissory Notes. Unsecured promissory notes are often a front for scams.
Commissions. The investment opportunity is probably a lemon, but the fraudster makes
a big commission from each and every sale.
How Can I Protect Myself?
Many investment scams have been peddled through so-called “free lunch”
investment seminars across the nation. While there are some legitimate
investment seminars out there, it’s always worth approaching these
promotions with caution.
If you are interested in an investment seminar opportunity, here are a
few steps you can take to make sure it’s legitimate:
Before the Seminar: Learn more about the company sponsoring it. Check out their website and
request that more information be mailed to you. Talk to state and federal
regulators about the seminar and the company running it. Determine if
the person is even registered and can legally represent what is being
pitched—check out FINRA's BrokerCheck.
During the Seminar: Ask questions. Make sure you understand the risks. Take any high-pressure
sales tactics or pressure to “buy now” as a red flag. Get
documentation in writing.
After the Seminar: Wait to make a decision until after the seminar. Verify what you’ve
been told, and look for any “fine print” in the documents
you’ve received. Carefully consider how it fits in with your financial
goals and overall investment plan.
If you have further questions, or if you believe you have already lost
money in an investment scam, reach out to the experienced investment fraud
attorneys with Meyer Wilson today.