There are several common investment fraud schemes that individuals should be aware of. Some of the most common include:
Ponzi Schemes: In a Ponzi scheme, the fraudster uses funds from new investors to pay returns to existing investors, creating the illusion of a profitable investment.
High-yield Investment Programs (HYIPs): These schemes promise high returns with little or no risk and often involve investments in non-existent or speculative ventures.
Pyramid Schemes: In a pyramid scheme, individuals are recruited to invest and then are encouraged to recruit others to invest. The scheme relies on the constant recruitment of new investors to generate returns for earlier investors.
Advance Fee Fraud: In this scheme, the fraudster requires an upfront fee in order to release the promised investment or returns.
Insider Trading: Where a person uses nonpublic information to trade securities or give advice to others for personal gain.
Internet Fraud: Investment fraud schemes that are advertised and promoted through the internet, such as fake websites and social media pages, are becoming increasingly common.
It's important to note that these are not the only investment fraud schemes and that new ones appear all the time. Always do your due diligence before investing and be wary of any unsolicited offers.