The SEC has identified a few traits that often signify a fraudulent financial scheme. It is important to understand that almost all types of investing incur some level of risk, and many forms do not carry with them guaranteed profits. If an investment opportunity (1) guarantees a specific return, (2) guarantees that return by a certain time, and (3) is not registered with the SEC, the SEC advises to invest with caution as these as identifiers of fraud.