Date: 11 July 2010
Below is a real case that happened before and is good to learn from it. Is good to know more about investment fraud, Ponzi schemes like an example that "Bernard Madoff" the US$65 billions investment scandal, the latest largest investment fraud so far. it will alway happen in anywhere anyplace if there is people tend to think of high yield high return investment with no risk, this is too good to be truth.
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In other instances, victims are persuaded to invest in sophisticated or exotic-sounding schemes commonly known as high yield investment programs ("HYIP"). Such investment schemes are usually offered via the internet with promises of high returns. Usually, the investment and withdrawals are made via e-currency, such as e-gold, e-bullion and INTGold. Many HYIP have turned out to be ponzi scams, where the invested funds from new entrants are used to pay existing investors. HYIP usually discloses little or no details on their management and the underlying investment to generate the promised returns.
The public should be wary of HYIP. Even if you receive your returns, it is often paid from the investment of newer entrants. Furthermore, most of such schemes operate anonymously over the Internet and could operate outside the jurisdiction of Singapore, making it difficult to investigate and recover monies when such scheme collapses.
Members of public should be suspicious of any deals that promise unrealistic returns with little risks. Avoid making hasty or immediate decisions. Find out more about the firm, salesperson and investment through independent and credible sources and seek professional advice if necessary.
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Alway ask more question before invest your money in the fund, if you don't you will be sorry for NOT doing your own due diligence.
Further reading: How to smell a rat, by Ken Fisher.
