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Investment Fraud

Investment Fraud. Americans lose an estimated each year to investment fraud. $40 billion. Why?. Lack of financial awareness Poor planning early in life Low rates of return Certificates of deposit, savings accounts, etc. Rash decisions “Easy money” Too trusting Fear.

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Investment Fraud

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  1. Investment Fraud

  2. Americans lose an estimated each year to investment fraud $40 billion

  3. Why? • Lack of financial awareness • Poor planning early in life • Low rates of return • Certificates of deposit, savings accounts, etc. • Rash decisions • “Easy money” • Too trusting • Fear

  4. The Victims Include... • Doctors • Lawyers • Teachers • College Students • Business People • Retired/Elderly No one is immune to fraud. Anyone can become a victim.

  5. “Double your money in ninety days!” This is a risk-free guarantee High reward with low risk You are lucky to be getting in on the ground floor Outrageous Promises

  6. Financial Professionals • Unsuitable investments • Poor investment advice • Fraudulent broker acts • Insurance agents/unregistered agents

  7. What Can Be Done? • Report suspicious or fraudulent activities • Check into the investment opportunities and the people selling them

  8. What Can Be Done? Financial Education Investigate Before You Invest • www.crimes-of-persuasion.com • www.ihatefinancialplanning.com • www.fl2010.com • www.jumpstart.org • www.econed-in.org • www.sec.gov • www.nasaa.org • www.sos.IN.gov

  9. Investment Myths • High reward with no risk • Scams do not happen to smart people • .com companies are a sure bet • This investment is guaranteed/insured • No written information is available • No securities license or registration is necessary to sell this

  10. Red Flags • This offer is only good today/this is a limited-time opportunity • Just give me your credit card and checking account number • This is only available to a select group • I get nothing out of this deal

  11. Red Flags • Do not tell anyone -- not even family • I will come to you; you don’t have to come to me • Foreign banks pay great interest rates and have no taxes associated with them • This is “insider” information

  12. Common Types of Fraud • Pyramid Schemes

  13. Common Types of Fraud • Ponzi Schemes • Charles Ponzi • Don Pratt • International Prime Bank Schemes • Royal Meridian Bank • Affinity Fraud • The Church of God, Inc. • Promissory Notes • James Carpenter

  14. Common Types of Fraud • Unscrupulous Brokers • Poor advice • Unsuitable investments • Senior Fraud • Variable and charitable gift annuities • Viaticals • Promissory notes • Insurance Agents/Unlicensed Agents • Any agent selling securities must be licensed through the Secretary of State Todd Rokita’s Office

  15. Avoiding Fraud • Hang up the phone • Ask questions! • Remember, those touting investments are not doing it to help you out • Contact Secretary of State Todd Rokita’s Office for information regarding the opportunity and the person offering it

  16. Fraud Hotline (800)223-8791 Website www.sos.IN.gov Location 302 W. Washington St. Room E-111 Indianapolis 46204 Report Investment Fraud Check On Securities Franchises Loan Brokers Exempt Filings Broker Dealers Investment Advisors Enforcement Actions Secretary of State Todd RokitaWe Are Here to Help Hoosiers!

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