The premise of a Ponzi scheme is that potential investors are attracted to a project with the guarantee of high returns and the funds raised from new members are used to pay off earlier investors. Ponzi schemes are based on lies, as fake returns are created from new investments. Such was the case with a famous Ponzi scheme orchestrated by one, Bernie Madoff, for two decades. AS good as it may look to its participants, such schemes are never perpetual and burst when fresh inflow of funds is unable to meet obligations. This cause huge loses to the investors, the worst of it being the loss of confidence in the financial system. Phrases such as “guaranteed returns,” “Upscale exclusive opportunities,” and “offshore investments” are common to them all; enabling them to fall prey to the false claims of easy gains.

Pump and Dump is an investment strategy used to defraud investors of their hard earned cash that has existed in the market since the inclusion of the securities market in the economy. In this example, there is a promotion for the stock of a company as the next hot investment and all purchasers of that stock are sucked into it. The share price of the stock is almost non-existent and once a certain amount of resources has been put into the stock the price soars, in that, the fraudsters cashes their share of the stocks before the price drops. Avoid unsolicited correlate investment proposal especially where the stocks are branded as “sure winners.” Always remember to do due diligence before any investment decision.

Another widespread form of swindling is penny stock scams which are related to ‘pump and dump’ activities. These fraudulent strategies claim mouthwatering profits from investing in very cheap stocks, often from firms outside the major stock exchanges, such as those of NYSE. Most times however, these so called penny stocks are traded over less stringent market places, such as the Pink sheets or the OTC where manipulation and fraud can be easily executed. Such stocks can be very hazardous to any investor. Therefore, precaution is advised before making any investments on such stocks.

In recent years, investment brokers have adopted practices aimed at eliminating broker fraud. Front-running involves a broker executing a buy or sell order of his or her own shares knowing that a client’s trade will affect the market before executing the client’s market order. Others include: creating too much hype for their clients to day-trade, failing to inform clients about dividend policies, and using ambiguous statements in describing costs associated with short sales. There are many such risks, and it is necessary to be on the lookout for them in order to safeguard one’s investments.

People understand the concept of a boiler room from the movie The Wolf of Wall Street. Cold-calling centers where brokers are given targets to sell a given percentage of stocks bull dozing techniques to unsuspecting investors- unequivocally dubious ones. The number of traditional boiler rooms might have been lessened in comparison to a couple of years ago, these systems have taken a different dimension, especially infiltrating the internet where con artists exploit different tools social media, groups, electronic mails and even impostor webinars in order to defraud investors. The phenomenon of these contemporary boiler rooms is on the Kenyan wave and the systems continue evolving, always managing to con gullible people.

These so call service signal providers do what they claim the services they provide and there when to buy stock options in the market and when to sell them. Such an offer is tempting from mastering but this hope is easily dashed as the number of such experts who simply winde up being witchdoctors or worse, participate in pumping and dumping. The very first step, however, involves, as it should, in this case, reading up on the fees versus subscriptions shall investigate as i.

With respect to stock trades gone bad, there’s still some light at the end of the tunnel. Recovery from stock scams with Ontario-Recovery helps victims of stock fraud by offering them legal services and communicating with authorities on such victims’ behalf to get them their money back. There is an extensive number of professionals who will study your case completely and a specific case worker who will be shared along the process of your recovery. Asserting a high level of achievement and numerous satisfactory feedbacks, Ontario-Recovery is definitely one of those who will fight for your funds restoration.