Private Placement Scams are the latest investment scams, and they work like this: a company runs an offer where you can invest in its business. The company offers to share the profit with investors if their investment is successful. It does this by buying high-priced goods or services from an unrelated supplier, which then gets credited to your account. This puts your money into the company’s pocket, leaving you with nothing. This article will help you to avoid falling for such scams.
What’s a Private Placement Scam?
A private placement scam is an investment opportunity where you can expect to make a profit without owning any part of the asset. The company sells shares, but it never holds or invests your money , and assures that its appointed agent will invest it beneficially in its business. The company’s not an agent for you, but it claims to be one.
Many private placements are used by fraudsters to sell shares in penny stocks. Many of these companies have yet to meet even minimal licensing standards, but they let you sign up for their promises of big profits. The investors get only worthless securities printed on thin air, while the scammers use your money for themselves. Navigate this authentic website for more info on private placement program scam.
How to Protect Yourself from a Private Placement Scam?
Sophisticated fraudsters use high technology, multiple identities and complex systems in order to lure you into becoming an investor. This makes it difficult if not impossible for the victim to determine who really has accessed his money. For this reason, it’s important that you invest only in companies with whom you feel comfortable.
You can verify the company by looking for articles about them on sites like, which compare different businesses against various subjectively determined standards of quality. It also pays to go through unsolicited e-mails sent to you by your bank and investment advisors. Their promotional messages can be included in a list of telltale signs that should instill caution into the investor about who is really doing business with him or her. These include:
- The e -Mail Company claims that it is a certified public accounting firm, but the only official credential provided by means of identification is an expired PhD diploma.
- Opening your bank account with them does not require you to fill out any documents, and their corporate address for sending e -mails to you is not really an address where they are located.
- They send unsolicited e-mails through your online banking login, requesting you to open a blocked account or credit card for their company.
How to Avoid the AI Placement Scam?
There are many ways to lose your money in the stock market, so it is important for you use only expert financial advisors. Their range of services includes not just stocks and mutual funds but also foreign currency trading options that can help investors diversify their investments across continents. Be sure that they invest in stocks in companies that are globally recognized brands, with solid balance sheets and healthy operations.
A company whose business is booming but yet their market value has remained static over the last several months will not make you investment portfolio attractive. Of course, there are lots of other causes why their stock price is at standstill or even fallen further. Investors should do thorough research before choosing which company to buy into if they intend investing in stocks for the long haul.
Conclusion
Private Placement scam is an illegal investment scheme. If you are involved in any private placement, you should be very careful. Report you to the Federal Trade Commission so they can take action. One-prophet is an illegal stock market platform, invest carefully or lose everything!