Investors are constantly under the threat of being taken in by fraud. Whether it’s an internet related scam or a Madoff style Ponzi scheme, there are many ways that fraudsters are trying to get at your money.
Threats among the North American Securities Administrator’s Top 10 include:
Crowd funding and internet offers. There is little to no regulation of this type of business and NASAA has noted more than 1600 new domain names related to crowd funding.
Bad advice from investment advisors. Many advisory firms have come under state supervision recently and have been found wanting. State actions against these firms has nearly doubled in the last year.
Self-directed IRAs. You can use money from a self-directed IRA to invest in property or a small business. There are a lot of scams going where investors are putting their money in plans that aren’t backed by real properties or legitimate businesses.
As always it is important to do due diligence before you invest. You need to know the companies and the people that run them.