Fraud

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The organizations that protect consumers against financial fraud estimate that each year investors lose billions of dollars in fraudulent investment schemes. Investors face increasingly complex and confusing scams as con artists continue to discover new and inventive ways to cheat the public.

Because education and awareness are the investor's first line of defense against fraud, the U.S. Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Trade Commission and many other organizations devote substantial resources to provide information that can help investors recognize and avoid fraud.

Commodity Futures Trading Commission Advisories

(Also see: Commodity trading fraud after natural disasters)

The CFTC publishes a series of Fraud Advisories [1] on its Web site that focus on schemes related to futures products. The advisories explain how the schemes work and give tips on how to avoid falling victim to these too "good to be true" opportunities.

  • Commodity Pool Fraud [2]
  • Foreign Currency (Forex) Fraud [3]
  • CFTC Brochure on Forex Fraud PDF [4]
  • CFTC Brochure on Forex Fraud HTML [5]
  • Foreign Exchange Currency Fraud: CFTC/NASAA Investor Alert [6]
  • Precious Metals Fraud [7]
  • Commodity Trading Systems Sold on the Internet [8]
  • Profits Based on Hurricane Katrina [9]
  • Profits Based on Seasonal Demand or Other Well-known Public Information [10]
  • Profits from the War on Terrorism [11]
  • Phony Futures and Options Web Sites [12]

Securities and Exchange Commission Investor Publications

The SEC's Office of Investor Education and Advocacy [13] provides a variety of services to address investors' problems and questions. Several of the publications staff have developed have been produced collaboratively with other agencies.

  • Advance Fee Fraud Schemes [14]
  • Affinity Fraud: How to Avoid Investment Scams that Target Groups [15]
  • Affinity Fraud: How to Avoid Investment Scams that Target Groups - Spanish [16]
  • Affinity Fraud: How to Avoid Investment Scams that Target Groups - Creole [17]
  • Auto-Surfing: What You Need to Know [18]
  • Avoiding Internet Investment Scams: Tips for Investors [19]
  • Broken Promises: Promissory Note Fraud [20]
  • CFTC Warning About Foreign Currency Trading Frauds [21]
  • Cold Calling: Unsolicited Calls from Brokers [22]
  • Fake Seals and Phony Numbers: How Fraudsters Try to Look Legit [23]
  • The Fleecing of Foreign Investors: Avoid Getting Burned by "Hot" U.S. Stocks [24]
  • Fraud in the Sale of Unregistered Securities of Telecommunications Technology Ventures [25]
  • Fraudulent Telemarketers: How to Avoid Scams [26]
  • Guide to Identifying and Avoiding Securities Fraud [27]
  • "High Yields" and Hot Air [28]
  • How to Avoid Fraud [29]
  • Identity Theft: Learn How to Protect Yourself [30]
  • Information Matters [31]
  • Internet Fraud: How to Avoid Internet Investment Scams [32]
  • Junk Faxes: How to Handle those "Blasted" Faxes [33]
  • Microcap Stock: A Guide for Investors [34]
  • "Mutual-to-Stock" Conversions: Tips for Investors [35]
  • Oil and Gas Scams: Common Red Flags and Steps You Can Take to Protect Yourself [36]
  • "Phishing" Fraud: How to Avoid Getting Fried by Phony Phishermen [37]
  • Phish&Dump.con: Tips for Avoiding Stock Scams [38]
  • SIPC Exposes Phony "Look-Alike" Web Site [39]
  • Stock Market Fraud "Survivor" Checklist [40]
  • Warning to All Investors About Bogus "Prime Bank" and Other Banking-Related Investment Schemes [41]
  • Worthless Stock: How to Avoid Doubling Your Losses [42]
  • "Wrong Numbers" and Stock Tips on Your Answering Machine [43]
  • Identity Theft - Online Brokerage Accounts:What You Can Do to Safeguard Your Money and Your Personal Information [44]

NFA Investor Alerts

The National Futures Association (NFA) has developed specific customer reporting requirements for its Forex Dealer Members (FDMs), in order to insure the clarity and conformity of statements and confirmations and thus minimize forex fraud.[45]

Federal Trade Commission Resources

The FTC's Bureau of Consumer Protection [46] works to prevent fraud, deception, and unfair business practices in the marketplace. The Bureau enhances consumer confidence by enforcing federal laws that protect consumers, providing information to help them exercise their rights, and giving them a means to file complaints about fraud.

  • Day Trading Ads: Cutting through the 'Bull' [47]
  • Day Trading Ads: Cutting through the 'Bull' (PDF) [48]
  • Investment Risks [49]
  • Investment Risks (PDF) [50]
  • Test Your Investment IQ [51]
  • Test Your Investment IQ (PDF) [52]

References

  1. CFTC Fraud Advisories. CFTC.
  2. Commodity Pool Fraud. U.S. Commodity Futures Trading Commission.
  3. Foreign Currency (Forex) Fraud. U.S. Commodity Futures Trading Commission.
  4. CFTC Brochure on Forex Fraud PDF. U.S. Commodity Futures Trading Commission.
  5. CFTC Brochure on Forex Fraud HTML. U.S. Commodity Futures Trading Commission.
  6. Foreign Currency Fraud: CFTC/NASAA Investor Alert. U.S. Commodity Futures Trading Commission.
  7. Precious Metals Fraud. U.S. Commodity Futures Trading Commission.
  8. Commodity Trading Systems Sold on the Internet. U.S. Commodity Futures Trading Commission.
  9. Profits Based on Hurricane Katrina. U.S. Commodity Futures Trading Commission.
  10. Profits Based on Seasonal Demand or Other Well-know Public Information. U.S. Commodity Futures Trading Commission.
  11. Profits from the War on Terrorism. U.S. Commodity Futures Trading Commission.
  12. Phony Futures and Options Web Sites. U.S. Commodity Futures Trading Commission.
  13. Investor Information. U.S. Securities and Exchange Commission.
  14. Advance Fee Fraud Schemes. U.S. Securities and Exchange Commission.
  15. Affinity Fraud: How to Avoid Investment Scams that Target Groups. U.S. Securities and Exchange Commission.
  16. Affinity Fraud: How to Avoid Investment Scams that Target Groups (Spanish). U.S. Securities and Exchange Commission.
  17. Affinity Fraud: How to Avoid Investment Scams that Target Groups (Creole). U.S. Securities and Exchange Commission.
  18. Auto-Surfing: What You Need to Know. U.S. Securities and Exchange Commission.
  19. Avoiding Internet Investment Scams: Tips for Investors. U.S. Securities and Exchange Commission.
  20. Broken Promises: Promissory Note Fraud. U.S. Securities and Exchange Commission.
  21. CFTC Warning About Foreign Currency Trading Frauds. U.S. Securities and Exchange Commission.
  22. Cold Calling: Unsolicited Calls from Brokers. U.S. Securities and Exchange Commission.
  23. Fake Seals and Phony Numbers. U.S. Securities and Exchange Commission.
  24. The Fleecing of Foreign Investors: Avoid Getting Burned by "Hot" U.S. Stocks. U.S. Securities and Exchange Commission.
  25. Fraud in the Sale of Unregistered Securities of Telecommunications Technology Ventures. U.S. Securities and Exchange Commission.
  26. Fraudulent Telemarketers: How to Avoid Scams. U.S. Securities and Exchange Commission.
  27. Guide to Identifying and Avoiding Securities Fraud. U.S. Securities and Exchange Commission.
  28. "High Yields" and Hot Air. U.S. Securities and Exchange Commission.
  29. How to Avoid Fraud. U.S. Securities and Exchange Commission.
  30. Identity Theft: Learn How to Protect Yourself. Federal Trade Commission.
  31. Information Matters. U.S. Securities and Exchange Commission.
  32. Internet Fraud: How to Avoid Internet Investment Scams. U.S. Securities and Exchange Commission.
  33. Junk Faxes: How to Handle those "Blasted" Faxes. U.S. Securities and Exchange Commission.
  34. Microcap Stock: A Guide for Investors. U.S. Securities and Exchange Commission.
  35. "Mutual-to-Stock" Conversions: Tips for Investors. U.S. Securities and Exchange Commission.
  36. Oil and Gas Scams: Common Red Flags and Steps You Can Take to Protect Yourself. U.S. Securities and Exchange Commission.
  37. "Phishing" Fraud: How to Avoid Getting Fried by Phony Phishermen. U.S. Securities and Exchange Commission.
  38. Phish&Dump.con: Tips for Avoiding Stock Scams. U.S. Securities and Exchange Commission.
  39. SIPC Exposes Phony "Look-Alike" Web Site. U.S. Securities and Exchange Commission.
  40. Stock Market Fraud "Survivor" Checklist. U.S. Securities and Exchange Commission.
  41. Warning to All Investors About Bogus "Prime Bank" and Other Banking-Related Investment Schemes. U.S. Securities and Exchange Commission.
  42. Worthless Stock: How to Avoid Doubling Your Losses. U.S. Securities and Exchange Commission.
  43. "Wrong Numbers" and Stock Tips on Your Answering Machine. U.S. Securities and Exchange Commission.
  44. Identity Theft - Online Brokerage Accounts:What You Can Do to Safeguard Your Money and Your Personal Information. U.S. Securities and Exchange Commission.
  45. NFA Forex Investor Alert. National Futures Association.
  46. FTC Bureau of Consumer Protection Who We Are. Federal Trade Commission.
  47. Day Trading Ads: Cutting through the 'Bull'. Federal Trade Commission.
  48. Day Trading Ads: Cutting through the 'Bull' (PDF). Federal Trade Commission.
  49. Investment Risks. Federal Trade Commission.
  50. Investment Risks (PDF). Federal Trade Commission.
  51. Test Your Investment IQ. Federal Trade Commission.
  52. Test Your Investment IQ (PDF). Federal Trade Commission.