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Morgan Lawnet Report: Walking Tiresome Investments: Zombie Financial Scams
Morgan Lawnet Report:
Marijuana Investments.Mother Nature has never better hotter, especially in states that have legalized recreational or medicinal marijuana. But that doesn’t mean you can easily profit. Here’s NASAA’s warning:
“Many of these companies are micro-cap companies selling low-priced securities which typically are highly speculative and carry a high degree of risk for investors. Securities regulators are seeing “pump and dump” scams, typical of micro-cap offerings. Fraudsters lure investors with aggressive, optimistic, and potentially false or misleading information designed to create unwarranted demand for shares of a small, thinly traded company with little or no history of financial success (the “pump”).
Once share prices and volumes peak, scammers behind the ploy sell their shares at a profit, leaving investors with worthless stock (the “dump”). Investors should think carefully and do their due diligence before jumping into marijuana-related investments.”
Bottom Line: Although there’s money to be made in marijuana, high-pressure stock sales are a tip-off of a boiler room scam.
Binary Options.I had never heard of these vehicles, which are dangerous derivatives in which you can lose all of your money. This is the report from NASAA, the state securities group:
“Binary options are securities in the form of options contracts that have a payout that depends on whether the underlying asset – for example, a company’s stock or a stock index – increases or decreases in value.
In such an all-or nothing payout structure, investors betting on a stock price increase face two possible outcomes when the contract expires: they either receive a pre-determined amount of money if the value of the asset increased over the fixed period, or no money at all if it decreased. Unlike a traditional option, a binary option will pay a fixed sum at expiration regardless of the magnitude of the difference between the settlement value and the option’s exercise price.”
Bottom Line: Avoid these offers. You can lose all of your investment.
Stream of Income Investments.Also known as “pension advances,” these operations are really selling high-interest loans. I’ve written about them several times in the past. They can be toxic.
“These investments can carry significant risks as laws may prohibit the assignment of the stream of income/benefits, the seller typically maintains the legal right to redirect the payment, and if the seller does redirect the payment, the investor may be left with an unenforceable contract right.
In addition, the benefits are contingent on the life of the seller, and even life insurance policies on the seller’s life may be cancelled and do not protect an investor if a seller simply redirects the income stream. Often veterans and disabled persons are preyed upon to assign their benefits when they experience financially stressful times, selling much needed future benefit payments at a significant reduction.”
Bottom Line: There’s no free lunch in “selling” or “buying” pension payments. You pay dearly one way or another.
Digital Currency and Cybersecurity Risks.Although I love the idea of a digital currencies (no paper, no central bank), they are not ready for prime time. They need to be backed by something. You can’t create them out of thin air.
“Digital currencies are emerging as trendy way to pay for goods and services. Bitcoin, perhaps the most popular digital currency, was priced at around $10 per unit in early 2013 but peaked at around $1,200 per unit later that year.
The rapid price increase sparked considerable public interest and media attention, creating a fresh market for securities offerings tied to digital currencies. Unfortunately, unscrupulous promoters may be attempting to capitalize on this popularity by illegally offering securities tied to digital currencies.”
Bottom Line: Digital currencies may catch on, but wait until we have some more regulation to protect you.
Other Scam Standbys
It’s worth mentioning that some frauds never seem to go away. The include pyramid/Ponzi scams, private offerings, promissory notes, internet fraud and oil/gas investments.
What’s the best way avoid being bamboozled?
Check out a broker’s background through your state securities regulator. Do they have a sketchy history or several complaints lodged against them?
Also use a third party who has no interest in a transaction to vet an investment. I would run it by a trusted accountant, lawyer, certified financial planner or chartered financial analyst who act as “fiduciaries,” that is, professionals who have to put your best interest first.
The homework you do now can save you a lot of money down the road.
I admire to search around for at what’s on the radar conceal of affirm securities regulators. These watchdogs are the true law enforcement officers on the beat by manner of a superb deal of financial scams.
That is a checklist of top swindles arresting zombie investments that never seem to totally recede. The North American Securities Regulators Association (NASAA) has been alerting investors on these products:
Marijuana Investments.Mother Nature has never better hotter, particularly in states which luxuriate in legalized leisure or medicinal marijuana. But that would no longer point out it’s possible you’ll perhaps perhaps presumably presumably effortlessly income. That is NASAA’s warning:
“Hundreds of those corporations are micro-cap corporations selling low-priced securities which on the whole are extremely speculative and elevate a excessive stage of likelihood for investors. Securities regulators are seeing “pump and dump” scams, typical of micro-cap offerings. Fraudsters trap investors with aggressive, optimistic, and potentially counterfeit or misleading data designed to derive unwarranted question for shares of a minute, thinly traded firm with minute or no history of financial success (the “pump”).
Once part costs and volumes top, scammers within the lend a hand of the ploy sell their shares at a income, leaving investors with nugatory stock (the “dump”). Merchants must serene assume fastidiously and live their due diligence earlier than leaping into marijuana-linked investments.”
Backside Line: Though there would possibly be money to be made in marijuana, excessive-tension stock gross sales are a tip-off of a boiler room rip-off.
Binary Solutions.I had never heard of those vehicles, which are unsafe derivatives at some level of which you are going to lose your whole money. That is the file from NASAA, the affirm securities community:
“Binary alternate solutions are securities within the compose of alternate solutions contracts which luxuriate in a payout that depends on whether or no longer the underlying asset – as an illustration, a firm’s stock or a stock index – will improve or decreases in charge.
In such an all-or nothing payout building, investors making a wager on a stock tag amplify face two imaginable outcomes when the contract expires: they either uncover a pre-sure amount of cash if the charge of the asset elevated over the mounted duration, or no money in any appreciate if it decreased. Unlike a feeble likelihood, a binary likelihood will pay a mounted sum at expiration no subject the magnitude of the distinction between the settlement charge and the selection’s exercise tag.”
Backside Line: Retract away from these affords. That you would be capable of lose your whole investment.
Circulate of Profits Investments.Also identified as “pension advances,” these operations are truly selling excessive-hobby loans. I’ve written about them a lot of times within the previous. They would possibly perhaps even be toxic.
“These investments can elevate most indispensable risks as prison guidelines would possibly perhaps presumably prohibit the assignment of the circulation of income/benefits, the seller on the whole maintains the ethical true to redirect the charge, and if the seller does redirect the charge, the investor will be left with an unenforceable contract true.
As well to, the benefits are contingent on the existence of the seller, and even existence insurance coverage insurance policies on the seller’s existence will be cancelled and live no longer offer protection to an investor if a seller merely redirects the income circulation. Assuredly veterans and disabled persons are preyed upon to avoid wasting their benefits when they abilities financially stressful times, selling well-known wanted future attend funds at a most indispensable reduction.”
Backside Line: There would possibly be no longer any free lunch in “selling” or “attempting to win” pension funds. You pay dearly one manner or but every other.
Digital Forex and Cybersecurity Risks.Though I admire the root of a digital currencies (no paper, no central financial institution), they save no longer seem like prepared for high time. They must be backed by one thing. You can not derive them out of thin air.
“Digital currencies are emerging as stylish manner to pay for items and products and providers. Bitcoin, presumably the most up-to-date digital currency, was once priced at around $10 per unit in early 2013 but peaked at around $1,200 per unit later that year.
The rapid tag amplify sparked great public hobby and media consideration, creating a peculiar market for securities offerings tied to digital currencies. Sadly, unscrupulous promoters will be attempting to capitalize on this recognition by illegally offering securities tied to digital currencies.”
Backside Line: Digital currencies would possibly perhaps presumably opt on, but wait until we luxuriate in some more law to offer protection to you.
Assorted Rip-off Standbys
Or no longer it’s worth pointing out that some frauds never seem to leave. The encompass pyramid/Ponzi scams, non-public offerings, promissory notes, net fraud and oil/gas investments.
What’s the exact manner steer certain of being bamboozled?
Test out a broker’s background thru your affirm securities regulator. Develop they’ve a sketchy history or a lot of complaints lodged against them?
Also exercise a 3rd party who has no hobby in a transaction to vet an investment. I would scoot it by a depended on accountant, lawyer, certified financial planner or chartered financial analyst who act as “fiduciaries,” that is, professionals who need to build your ideal hobby first.
The homework you live now can place you a immense assortment of cash down the avenue.