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Investment Fraud

When people join online dating sites, they are generally looking for companionship, not a good investment opportunity. When they join business networking sites, they want to find contacts, not fall for a scam. Unfortunately cases of investment fraud that started out in unexpected places like dating sites and social networking sites are popping up more and more.

As technology continues to advance, fraudsters are adopting more unconventional approaches to soliciting victims and the Internet provides a unique opportunity to do just that. The Internet is completely anonymous, for the most part; so it can be very difficult to know if the person on the other end of the computer is who they say they are. As these real case examples illustrate, investors in Indiana and across the country are falling victim to investment fraud online.

Public Awareness Initiative

In order to raise awareness about investment fraud perpetrated online and protect Hoosiers who may be susceptible to falling victim, our office launched an online public awareness initiative using a grant from the Investor Protection Trust. Through this effort, we are proactively fighting fire with fire by inserting our educational message into the spaces where fraudsters potentially solicit victims. In order to accomplish this, we created online ads, videos and websites to highlight four types of online scams that appear legitimate at first glance, but which really incorporate common techniques used by fraudsters. View the ads and websites for each scam to see the examples of investment fraud perpetrated online:


Online ad

Pondse Investment Funds uses some of the most common fraud tactics: promising to double your money in three months, claiming zero percent risk and guaranteed returns. These are all unrealistic promises meant to entice potential investors. When it comes to investing, there is always a level of risk involved and you are never guaranteed to make money.

Online ad

Investing in the stock market carries a higher level of risk compared to other types of investing, yet this company claims that not a single customer has ever lost money and the stocks they picked had a 150 percent increase in value. Again, these are flat out unrealistic promises. This company also claims to have insider information to help pick stocks on the rise. Insider information, or insider trading, is illegal and you should not work with anyone claiming to have it.

Online ad

Guaranteed returns with 200 percent interest and no income tax. If it sounds too good to be true, that's because it is. Banco di Lyre, offering complete confidentiality and high returns on the Manchukuo exchange rate, represents offshore and foreign currency investment scams. With these types of scams, victims typically never hear from the company again after sending the initial payment.

Online ad

Sutton Charles and Miller Energy Advisors represents a type of fraud that has been around a while: oil and gas ventures. The company touts a new technology that can accrue oil without drilling by using magnets. The fraudster uses scientific terms and jargon to make his pitch seem more legitimate. The company also makes it seem like this is a limited time offer only being given to a special group of people. By pressuring investors to act right away, the fraudster hopes they won't take time to fully research the opportunity and discover it's a scam.



This public awareness initiative was funded through a grant from the Investor Protection Trust, a nonprofit organization devoted to investor education. Since 1993, the IPT has worked with the states to provide the independent, objective investor education needed by all Americans to make informed investment decisions.



Protect Yourself from Investment Fraud Online

It's important to treat online investment opportunities like any other. Use these tips to help protect your hard-earned money:

  • Investigate the investment and the person or company offering the investment by calling the Indiana Securities Division at 1-800-223-8791 or visiting the Securities Portal.
  • Meet in person to discuss the investment opportunity. You can typically get a better read on someone when communicating face-to-face versus over the internet.
  • Get written information about the investment – not just via e-mail, but in hard copy. Every public investment should have a circular or prospectus that outlines the details of the investment. If they don’t want to put anything in writing, it’s probably a sign they aren’t legitimate.
  • Be cautious with your personal information, especially you giving it to anyone online. Don’t give out your name, address or other personal data unless you have verified that the company and/or individual are legitimate.
  • Don’t be fooled by promises of high returns that are “guaranteed” to make you money. Fraudsters routinely promote rates of return that are flat out unrealistic in an attempt to lure victims. They might also tell you that the investment is a limited time offer and you have to act right away. Their goal is to prevent you from taking time to research the opportunity.

Real Case Examples

Read about real-life cases of investment fraud perpetrated online right here in Indiana and across North America.

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