Advance fee frauds involve victims paying money in the hope of receiving something of greater value. This type of fraud takes on a myriad of forms, but they share some characteristics in common. Defrauders will often reach out to an investor...
investor protection guide
(Wex page)
In this investment scheme, brokers may advise clients that they can retire early by cashing out their retirement accounts – such as a 401(k) or pension fund – and investing instead in a traditional Individual Retirement Account (IRA) with...
(Wex page)
Affinity fraud is not a singular specific type of fraud but is rather defined as any and all frauds targeted towards members of an identifiable group of individuals such as those with a common religion, ethnic heritage, background, or...
(Wex page)
Auction rate securities (ARS) are debt or preferred equity securities whose interest rates are periodically reset through auctions and which are issued with long-term maturities or in perpetuity. ARS were promoted as being as safe as...
(Wex page)
An Equity-Indexed Annuity (“EIA”) is a financial product from insurance agencies that offers a minimum guaranteed return combined with a return linked to a market index. EIAs involve an “accumulation period,” when an investor makes a lump sum...
(Wex page)
The Internet can serve as an efficient tool for investors, but it is also an excellent tool for defrauders. The Internet allows individuals or companies to reach tens of thousands of people by building a web site, posting a message on an online...
(Wex page)
Some companies pay people to write online newsletters recommending their stocks, which are referred to as investment newsletters. Federal securities laws require the newsletters to disclose who paid for their product, the amount, and the type...
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Financial seminars are a marketing tool often used by broker-dealers and other entities to attract prospective clients. These seminars may be invitation-only or they may be advertised in local papers or on the internet. Financial seminars are...
(Wex page)
"Pump and Dump" is a type of stock fraud involving the use of false or misleading statements to increase stock prices and then sell the inflated stocks to the public. Stocks of microcap companies, which have low capitalizations and limited...
(Wex page)
Financial advisors may be designated “senior specialists” in order to imply a certain level of training and expertise regarding issues of importance to senior citizens. The Consumer Financial Protection Bureau (CFPB) reports that there are...