Unlucky Investor Traps


1 | Affinity fraud. Con artists target members of religious, political or ethnic groups.

2 | Churning. Unethical securities professionals make unnecessary or excessive trades to generate commissions.

3 | Equity-indexed certificates of deposit. In a volatile market, these uninsured CDs pose liquidity problems and are not suitable for most seniors.

4 | Oil and gas investment fraud. Sales materials provide “official looking” surveyor maps touting the likelihood that the “managers” of the drilling enterprise will hit pay dirt.

5 | Personal information scams. In the guise of helping customers fill out forms to qualify for legitimate benefits, the scammer collects information about personal financial assets.

6 | Prime bank schemes. These schemes promise high-yield, tax-free returns often purported to result from “off-shore trades of bank debentures.”

7 | Pump and dump schemes. Unethical broker-dealers frequently “pump” up the value of low-priced securities that are traded on Nasdaq “pink sheets” and then “dump” the stock after naïve investors have bought in at the inflated prices.

8 | Recovery rooms. Scam artists buy and sell the names of victims who have lost money to “recovery room” operators who promise, in return for a fee that the victim must pay in advance, to recover the money lost in a worthless investment.

9 | Registered high-interest promissory notes publicly advertised. These high-risk notes are not suitable for retirement funds.

10 | Sale and leaseback contracts. Investors are sold a piece of equipment such as a payphone, ATM machine or Internet booth located at a remote venue, where the investor cannot service and maintain the equipment and must enter into a servicing agreement.

Source: North American Securities Administrators Association.

SPONSORED REPORT

Revenue recognition: A complex effort

Implementing the new standard requires careful judgment. Learn how to make significant accounting judgments and document them and collaborate with peers for consistent application.

VIDEO

How to Excel pivot a general ledger

The general ledger is a vast historical data archive of your company's financial activities, including revenue, expenses, adjustments, and account balances. J. Carlton Collins, CPA, shows how to prepare data for, and mine data with, PivotTables.

QUIZ

News quiz: Taking an economic snapshot and looking to the future

Recent news included IRS actions that affect individuals and partnerships and a possibly influential move by a Big Four accounting firm.Take this short quiz to see how much you know about the news.