What are the different types of investment fraud?

Investment fraud is a form of white-collar crime that refers to the deceptive practices used to scam people out of their money or property. In California, the state has laws that prohibit a variety of investment frauds. The two main types of investment frauds are Ponzi schemes and boiler room schemes. A Ponzi scheme is a type of pyramid scheme where money from new investors is used to pay off earlier investors, instead of investing it in an actual business as promised. A boiler room scheme is when dishonest stockbrokers use high-pressure tactics to get people to buy stocks that are overvalued, hard to sell, or non-existent. In addition to common schemes, California also has laws that specifically target seniors. Senior Investment Fraud occurs when a scammer targets elderly people, oftentimes luring them into making investments that are not safe. This type of fraud typically involves high-pressure sales tactics, exaggerated promises, and promises of free services if a senior invests with them. Finally, California also has a law called the “Extended Statute of Limitations.” This law allows those who have been a victim of investment fraud to file a lawsuit up to three years after they discover they were victimized. This can be particularly useful if a scammer has made false promises or misrepresentations that were not discovered until long after the fraud occurred. Overall, California has laws in place to help protect people from a variety of investment frauds, including Ponzi schemes, boiler room schemes, senior investment fraud, and more.

Related FAQs

What is a private placement memorandum?
What is an Investment Fraud Law Suit?
What is the difference between a broker-dealer and an investment adviser?
What are the most common forms of investment fraud?
What is the role of the NASD in regulating the securities industry?
What is insider trading?
What is a Registered Investment Adviser (RIA)?
What is the purpose of the Investment Company Act of 1940?
What is the difference between a qualified and a non-qualified investor?
What should I know about mutual fund fees?

What are the different types of investment fraud?

Related FAQs

Related Blog Posts