The Bottom Line: Watching out for investment scams

Thanks for sharing.

Wow, Jennifer, I did not realize that so many scams by so called "legitimate companies" were happening.

I used to be a commodity broker and traded a lot of the commodities on the chicago board.

I remember a fiasco over 25 years ago concerning losing a huge amount of money on potatoes that involved the bank of boston, the clearing house, geldermann, and techvest commodities. It was expensive, but one heck of a learning exercise.

thanks

good info here

Excellent article and advice.

And we thought the money scams all came from overseas! Shame on these companies!

You're right on the money Chip. The commission started paying out money to "injured" Time-Warner investors on July 9. Here's the backstory (from the SEC release on the matter):

"The Commission brought a settled action against Time Warner in March 2005 alleging that Time Warner engaged in fraud and other accounting improprieties by artificially inflating its advertising revenue and Internet subscriber numbers, and by failing to properly consolidate the financial results of one of its subsidiaries, AOL Europe, S.A. Time Warner paid a $300 million civil penalty as part of the resolution of these claims. Including interest, the Fair Fund available for distribution is approximately $316 million."

And Judi, I wanted to follow your comment on hedge funds. Hedge funds are simply mutual funds primarily for accredited investors (investors with annual income of $200,000 or a networth of $1 million or more). However, unlike mutual funds, hedge funds are largely unregulated. That doesn't make them scams however (although, as you would guess, it may make them likelier candidates).

There has been a lot of legislative discussion on the hedge fund industry of late, so that may change soon. Plus, about two weeks ago we had the first hedge fund take itself public. Being traded on the stock exchange means they'll have to provide full disclosure. Hopefully other funds will follow.

What an interesting background you've had Randy. My father was a discount stock broker at one time, and so I learned about the markets as my summer job working in his office when I was in high school. It too was a great learning experience. (Thankfully, I made money rather than lost it in my experience though....I feel badly for your monetary loss Randy).

Great, informative article. Thanks for posting it.

Good article. One you did not mention although that may have blown over is a scam in Kentucky and Tennessee where the guy was selling interests in Oil leases; it was a Ponzi scheme where people were told that they would get 10 times there money back. Most only got .10 on the dollar back.

My advice any any investing is that if it sounds too good to be true; it probably is.

Also do an investment portfolio check up each month to see what your investments are doing and what your bank or consultant may be doing to your investments if you give them some autonomy in making moves in your portfolio.

Nice article, there are lots of scam out there...

And the nice thing of investing your money and part of your life right now that there are good ones also to profit...

A mutual find I have owned for decades recently had a negative stock split. I used to have X number of shares and now I have 2/3 X -- whoa! Never heard of that one before!
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Oh the criminals just keep doing what they love to do - attempt to bilk others.

Good work, Jennifer.

Love your photo, btw. Looks just like your icon, or is that the other way around?