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A film production company tells potential investors it is raising capital to produce a high-quality, low-budget family film with actors who are willing to sacrifice their usual high salaries for the sake of art. Claiming that the independent film market, cable television and video stores have increased the demand for movies, investors are "guaranteed" to make their money back. According to the prospectus, investor money will be spent on production, distribution and the screenplay.
Brokers of gemstones, rare coins or precious metals tell investors that the market price of these hard assets is skyrocketing. According to the brokers, the assets will increase in value — not only because experts have graded them rare, but also because of the demand.
Brokers of an FCC-licensed partnership tell consumers they’re raising capital to acquire a communications business that can be enhanced with new technology and turned into a competitive high-tech enterprise to be sold or developed for huge profits.
Investment brokers are claiming to sell ownership interests in a company that will offer Internet access to the public. The brokers maintain that investors will realize substantial gains from the fees the company will charge its users.
What’s wrong with these pictures? In a word — plenty.
It’s easy to make a new venture sound like a sure-fire money-maker, especially if the press is writing about successful legitimate companies in similar industries. Fraud promoters create the illusion of authenticity and success by incorporating, renting office space and issuing partnership units or stock certificates. But while they claim to offer investments in exciting sounding businesses or sell lucrative assets, they deliver cheap imitations of what they promise. As for consumers, they remain unaware that they’ve bought something of little or no value until their money is gone and profits have not materialized.
the company I’m investing in registered
to sell securities?
it "too late" if I don’t
invest my money now?
the investment have a track record?
is my money going?
I have an independent, knowledgeable, trustworthy
person who can advise me?
I know who I’m dealing with?
I tell a genuine company from a fictional
my sales representative tell me the risk
of losing my money was high?
I be certain a promoter is not lying to
I know when something is too good to be
Investigate Before You Invest |Top Ten Questions To Help You Avoid Trouble | Avoiding Online Investment Scams: Tips for Investors | Fraud In Cyberspace | Tips for Checking Out Online Newsletters: | Internet Fraud: Investor Tips | Choosing an Investment Professional | Cold Callers Must Follow Certain Rules | Portrait of a "Boiler Room" | Where the Frauds Are | Where the Frauds Are Part 2 | Fake Seals and Phony Numbers | Investor Alert | Tips for Avoiding Stock Scamson the Internet | Risky Business: "Pre-IPO" Investing | Avoiding Internet Investment Scams | Microcap Stock: A Guide for Investors | Trade Execution | Your Dollars at Risk | Tips for Online Investing | Questions asked about your Investments | Day Trading Ads: Cutting Through the "Bull" | Futures and Options: What You Should Know Before You Trade | Investment Risks | Invest Wisely: An Introduction to Mutual Funds | Variable Annuities: What You Should Know FAQ On Bond Investing