Three Scams to Keep an Eye Out For
It’s just about time to put on a costume and go out trick or treating, but full-sized candy bars aren’t the only targets out there this time of year. Fraudsters are out in full force looking for an easy mark to take advantage of, and it’s important to understand the dangers in order to protect your finances. The Financial Industry Regulatory Authority (FINRA) recently published a short list of scams to look out for this fall.
Binary Options Scams: At first glance, binary options seem like an easy way to make money. They’re a seemingly simple type of options contract where the outcome is entirely based on what happens in a yes-or-no scenario, like whether a specific asset will fall below or rise above a specific amount. When the option expires, it will either pay the investor a set amount of money, or they’ll receive nothing at all and lose whatever they invested. While this practice would be risky enough if the options were real, victims often aren’t even trading real options in the first place.
Boiler-Room Pump-and-Dumps: Fraudsters using this scheme target their marks and overload them with promises that their offer, usually a microcap or penny stock, is a can’t-miss opportunity that will make them rich. Once enough people buy into this stock, the fraudsters sell their own shares for a profit and leave the investors with essentially worthless stocks. More often than not, these stocks are related to something making headlines – one week it could involve a new clean energy technology, and the next it could be some new product promised to make an obscene amount of money in the marijuana industry.
Affinity Investment Fraud: Victims of this type of fraud are taken advantage of because they end up trusting the scammer because they both belong to a group the victim strongly identifies with. This can include a local organization, an alumni group, an ethnic community, a religious affiliation, and more. These scammers take advantage of the fact that their mark is less likely to complete a thorough background check or follow up on nondescript positive reports.
If you were the victim of a scam, our team of investment fraud lawyers at Meyer Wilson are ready to provide you with the experienced legal representation you need. Since we first started working with clients almost 20 years ago, we have successfully secured more than $350 million in verdicts and settlements. You can send us your information through our online form to request a free case evaluation today, or you can give us a call to speak with a member of our firm over the phone.