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Consumer Alert:

03/09/2012

Consumer Alert: Protecting Yourself from Ponzi Schemes

 

 

Consumer Alert: Protecting Yourself from Ponzi Schemes
 
TALLAHASSEE, Fla. (March 9, 2012) – The Florida Office of Financial Regulation (OFR) urges all consumers to be wary of potential Ponzi schemes when making investment decisions.
 
Investing carries a risk, but there is no need to add the uncertainty of whether you’ve invested with a con artist.
 
Educate yourself. The best way to protect your finances is by arming yourself with information. Ask questions. Make sure you fully understand the products, individuals and businesses you are dealing with. Check credentials. Use the OFR website, www.itsyourmoneyflorida.com, to verify a license and conduct a broker check. Look out for red flags, which may include any of the following:
 The promoter indicates he is one of you and can be trusted.
 The promoter engages in high pressure sales tactics (must invest now, this won’t last long).
 The promoter is asking for financial information such as net worth, current investments, and banking information.
 The promoter pressures investors to state they are sophisticated or have a high net worth.
 The promoter is willing to cut a “special” deal (promoter takes no commission, half off, or double the investment).
 The promoter has a history of regulatory or criminal enforcement actions, bankruptcy, civil litigation, or excessive negative media coverage.
 The promoter, who may be an issuer, broker, dealer, or representative, is not registered to offer or sell securities.
 The security being offered or sold is not registered.
 There is little or no written disclosure material or you have difficulty obtaining it.
 It is difficult or impossible to find objective information to verify claims made by the promoter regarding the investment or the background of the principals.
 The investment structure is complicated, exotic, or it just sounds too good to be true.
 The opportunity is “ground breaking, exclusive, secret”, or “offered only to a select few.”
 The investment opportunity is “guaranteed” or offers “little or no risk.”
 Promised investment returns are high in light of current market conditions and the risk is low. 
 Reported historic returns are always positive and overly consistent.
 Difficulties in receiving promised return are met with offers to “roll over” or transfer the investment to an even better “new” opportunity offered by the same promoter. 
 Business location is a mail drop or virtual office. 
 Size and location of office is not consistent with the type of business or the representations made to investors.  
 
If you have been victimized by a Ponzi scheme, or if you suspect questionable investment practices, file a complaint online with the OFR or call (850) Its-Your Money (850-487-9687).
 
For more information, contact the OFR Press Office:
 
Brittany Perez    
(850) 410-9709
 
Amy Alexander   
(850) 410-9789
 
Katie Norris