Call Now For a Free Consultation:
(614) 502-6165

If You Want to Avoid Investment Fraud, Watch Out for These Red Flags

Consistency. Like Bernie Madoff’s billion-dollar Ponzi scheme, many fraudulent investments show consistent returns – or promise consistent returns – quarter after quarter, year after year, even when the market itself is in decline. Investments fluctuate, as does the market itself. That’s the nature of investing. Watch out for anyone who promises you otherwise, or whose statements show otherwise; they are very likely running an investment scam.

Excessive Complexity. Some investments are inherently more complex than others, but if a representative, advisor, or broker is unable to clearly explain a product in which she wants you to invest – recognize the lack of clarity as a warning sign that the product may be either too risky or unsuitable for you.

Secrecy. If an advisor, broker, or sales rep tells you that a product’s investment strategy is “confidential” or refuses to answer your questions, you should consider the lack of disclosure a red flag. A legitimate investment opportunity will include full disclosure of the product’s underlying assets, the investment strategy, the expected rate of return, and the risks involved. If you aren’t given this information, it is very probable that either the product is a scam or the person pushing it is a con artist.

Unverifiable Claims. If someone insists that he has assets or connections he can’t – or won’t – back up, you should think twice before you invest in whatever he’s selling. “International connections,” pending “inheritances,” and the ability to raise “venture capital” are all claims previous scam artists have made to rope unsuspecting investors into investment fraud.

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

Share This Story
If you found the information provided by this article useful, consider sharing to your social media channels to help others in their search for reliable resources.
Consult with Our Legal Team
There is never a cost associated with a consultation
Columbus Office

614-224-6000
305 W. Nationwide Blvd
Columbus, OH 43215
Meyer Wilson
New Orleans Office

900 Camp Street 
Suite 337
New Orleans, LA 70130
Los Angeles Office

310-905-8688
2029 Century Park East,
Suite 400N
Los Angeles, CA 90067
Cleveland Office

216-600-1355
4781 Richmond Rd.
Suite 400
Warrensville Heights, OH 44128
Bloomfield Hills Office

248-817-8214
41000 Woodward Ave.,
Suite 350
Bloomfield Hills, MI 48304
Quick Links
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients of content from this site, clients or otherwise, should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. Read More
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter.
Read More
chevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram