What is investment fraud?

Investment fraud is a form of financial fraud in which someone tries to unlawfully obtain money or property from someone else through deceptive or fraudulent methods. Investment fraud is especially common in New York and can occur in various ways. Common forms of investment fraud include Ponzi schemes, insider trading, hedge fund fraud, boiler room operations, advance fee fraud, and securities fraud. In a Ponzi scheme, a fraudulent investment is created where earlier investors are paid with the funds of later investors. Insider trading is an unlawful practice involving the buying or selling of a security by someone who has access to confidential information. Hedge fund fraud is the misappropriation of funds by someone in a position of trust from people investing in a hedge fund. Boiler room operations involve telephone salespeople who use high-pressure tactics to convince investors to purchase stocks. Advance fee fraud is the practice of promising quick and easy returns for a fee. Lastly, securities fraud is the deception of investors by promising a return on an investment that never actually materializes. Investment fraud is a serious crime and can lead to hefty fines and jail time for those who are caught. It is important to always research any potential investments and be sure you understand the risks before investing.

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What is investment fraud?

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