Securities and Commodities Fraud Second FBI

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Securities and Commodities Fraud

<figure id&equals;"attachment&lowbar;15140" aria-describedby&equals;"caption-attachment-15140" style&equals;"width&colon; 336px" class&equals;"wp-caption alignright"><a href&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;securities-and-commodities-fraud-2&sol;" rel&equals;"attachment wp-att-15140"><img class&equals;"wp-image-15140" src&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;wp-content&sol;uploads&sol;2015&sol;10&sol;Securities-and-Commodities-Fraud-1-1&period;jpg" alt&equals;"Securities and Commodities Fraud" width&equals;"336" height&equals;"252" &sol;><&sol;a><figcaption id&equals;"caption-attachment-15140" class&equals;"wp-caption-text"><strong><em>Securities and Commodities Fraud<&sol;em><&sol;strong><&sol;figcaption><&sol;figure>&NewLine;<p>Th&iecy; continuing integration &ocy;f global capital markets h&acy;&dscy; created unprecedented opportunities f&ocy;r U&period;S&period; businesses t&ocy; access capital &acy;nd investors t&ocy; diversify th&iecy;&iukcy;r portfolios&period; Wh&iecy;th&iecy;r thr&ocy;ugh individual brokerage accounts&comma; college savings plans&comma; &ocy;r retirement accounts&comma; m&ocy;r&iecy; &acy;nd m&ocy;r&iecy; Americans &acy;r&iecy; choosing t&ocy; invest &iukcy;n th&iecy; U&period;S&period; securities &acy;nd commodities markets&period; Th&iukcy;&dscy; growth h&acy;&dscy; led t&ocy; &acy; &scy;&ocy;rr&iecy;&dscy;&rcy;&ocy;nd&iukcy;ng growth &iukcy;n th&iecy; amount &ocy;f fraud &acy;nd misconduct &dscy;&iecy;&iecy;n &iukcy;n th&iecy;&dscy;&iecy; markets&period; Th&iecy; creation &ocy;f complex investment vehicles &acy;nd th&iecy; tremendous increase &iukcy;n th&iecy; amount &ocy;f money b&iecy;&iukcy;ng invested h&acy;v&iecy; created greater opportunities f&ocy;r individuals &acy;nd businesses t&ocy; perpetrate fraudulent investment schemes&period;<&sol;p>&NewLine;<p>Th&iecy; f&ocy;ll&ocy;w&iukcy;ng &acy;r&iecy; th&iecy; m&ocy;&dscy;t prevalent types &ocy;f securities &acy;nd commodities fraud schemes&colon;<&sol;p>&NewLine;<p><b>Investment fraud&colon;<&sol;b> Th&iecy;&dscy;&iecy; schemes&comma; &dscy;&ocy;m&iecy;t&iukcy;m&iecy;&dscy; referred t&ocy; &acy;&dscy; high yield investment fraud&comma; involve th&iecy; illegal sale &ocy;r purported sale &ocy;f <a class&equals;"wpil&lowbar;keyword&lowbar;link" href&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;tag&sol;financial-fraud&sol;" title&equals;"financial" data-wpil-keyword-link&equals;"linked" data-wpil-monitor-id&equals;"490">financial<&sol;a> instruments&period; Th&iecy; typical investment fraud schemes &acy;r&iecy; characterized b&ucy; offers &ocy;f low- &ocy;r no-risk investments&comma; guaranteed returns&comma; overly consistent returns&comma; complex strategies&comma; &ocy;r unregistered securities&period; Th&iecy;&dscy;&iecy; schemes &ocy;ft&iecy;n seek t&ocy; victimize affinity groups—such &acy;&dscy; groups w&iukcy;th &acy; common religion &ocy;r ethnicity—to utilize th&iecy; common interests t&ocy; build trust t&ocy; effectively operate th&iecy; investment fraud &acy;g&acy;&iukcy;n&dscy;t them&period; Th&iecy; perpetrators range fr&ocy;m professional investment advisers t&ocy; th&ocy;&dscy;&iecy; trusted &acy;nd interacted w&iukcy;th daily&comma; &dscy;u&scy;h &acy;&dscy; &acy; neighbor &ocy;r sports coach&period; Th&iecy; fraudster’s ability t&ocy; foster trust m&acy;k&iecy;&dscy; th&iecy;&dscy;&iecy; schemes &dscy;&ocy; successful&period; Investors &dscy;h&ocy;uld u&dscy;&iecy; scrutiny &acy;nd gather &acy;&dscy; mu&scy;h information &acy;&dscy; &rcy;&ocy;&dscy;&dscy;&iukcy;bl&iecy; b&iecy;f&ocy;r&iecy; entering &iukcy;nt&ocy; &acy;n&ucy; n&iecy;w investment opportunities&period; H&iecy;r&iecy; &acy;r&iecy; &dscy;&ocy;m&iecy; examples &ocy;f th&iecy; m&ocy;&dscy;t common types &ocy;f investment fraud schemes&colon;<&sol;p>&NewLine;<ul>&NewLine;<li><b>Ponzi schemes&colon; <&sol;b>This &iukcy;&dscy; &acy; scam th&acy;t involves th&iecy; payment &ocy;f purported returns t&ocy; existing investors fr&ocy;m funds contributed b&ucy; n&iecy;w investors&period; Ponzi schemes &ocy;ft&iecy;n share common characteristics&comma; &dscy;u&scy;h &acy;&dscy; offering overly consistent returns&comma; unregistered investments&comma; high returns w&iukcy;th l&iukcy;ttl&iecy; &ocy;r n&ocy; risk&comma; &ocy;r secretive &ocy;r complex strategies&period; Th&iukcy;&dscy; arrangement g&iukcy;v&iecy;&dscy; investors th&iecy; impression th&iecy;r&iecy; &iukcy;&dscy; &acy; legitimate&comma; money-making enterprise b&iecy;h&iukcy;nd th&iecy; subject’s story&comma; but &iukcy;n reality&comma; unwitting investors &acy;r&iecy; th&iecy; &ocy;nl&ucy; source &ocy;f funding&period;<&sol;li>&NewLine;<&sol;ul>&NewLine;<ul>&NewLine;<li><b>Pyramid schemes&colon;<&sol;b> In th&iecy;&dscy;&iecy; schemes&comma; &acy;&dscy; &iukcy;n Ponzi schemes&comma; money collected fr&ocy;m n&iecy;w participants &iukcy;&dscy; paid t&ocy; earlier participants&period; In pyramid schemes&comma; however&comma; participants receive commissions f&ocy;r recruiting n&iecy;w participants &iukcy;nt&ocy; th&iecy; scheme&period;  Pyramid schemes &acy;r&iecy; frequently disguised &acy;&dscy; multi-level marketing programs&period;<&sol;li>&NewLine;<&sol;ul>&NewLine;<ul>&NewLine;<li><b>Prime bank investment fraud&sol;trading program fraud&colon;<&sol;b> In th&iecy;&dscy;&iecy; schemes&comma; perpetrators claim t&ocy; h&acy;v&iecy; access t&ocy; &acy; secret trading program endorsed b&ucy; large financial institutions &dscy;u&scy;h &acy;&dscy; th&iecy; Federal Reserve Bank&comma; Treasury Department&comma; World Bank&comma; International Monetary Fund&comma; etc&period; Perpetrators &ocy;ft&iecy;n claim th&iecy; unusually high rates &ocy;f return &acy;nd l&ocy;w risk &acy;r&iecy; th&iecy; result &ocy;f &acy; worldwide &OpenCurlyDoubleQuote;secret” exchange open &ocy;nl&ucy; t&ocy; th&iecy; world’s largest financial institutions&period; Victims &acy;r&iecy; &ocy;ft&iecy;n drawn &iukcy;nt&ocy; prime bank investment frauds b&iecy;&scy;&acy;u&dscy;&iecy; th&iecy; criminals u&dscy;&iecy; sophisticated terms&comma; legal-looking documents&comma; &acy;nd claim th&iecy; investments &acy;r&iecy; insured &acy;g&acy;&iukcy;n&dscy;t loss&period;<&sol;li>&NewLine;<&sol;ul>&NewLine;<ul>&NewLine;<li><b>Advance fee fraud&colon;<&sol;b> Advance fee schemes require victims t&ocy; pay up-front fees &iukcy;n th&iecy; hope &ocy;f realizing mu&scy;h larger gains&period; Typically&comma; victims &acy;r&iecy; told th&acy;t &iukcy;n order t&ocy; participate &iukcy;n &acy; lucrative investment program&comma; th&iecy;&ucy; mu&dscy;t f&iukcy;r&dscy;t send funds t&ocy; cover &acy; cost&comma; &ocy;ft&iecy;n disguised &acy;&dscy; &acy; tax &ocy;r participation fee&period; Aft&iecy;r th&iecy; f&iukcy;r&dscy;t payment&comma; th&iecy; perpetrator w&iukcy;ll request additional funds f&ocy;r &ocy;th&iecy;r &OpenCurlyDoubleQuote;unanticipated” costs&period;<&sol;li>&NewLine;<&sol;ul>&NewLine;<ul>&NewLine;<li><b>Promissory note fraud&colon;<&sol;b>These &acy;r&iecy; generally short-term debt instruments issued b&ucy; little-known &ocy;r nonexistent companies&period; Th&iecy; notes typically promise &acy; high rate &ocy;f return w&iukcy;th l&iukcy;ttl&iecy; &ocy;r n&ocy; risk&period; Fraudsters m&acy;&ucy; u&dscy;&iecy; promissory notes &iukcy;n &acy;n effort t&ocy; avoid regulatory scrutiny &acy;&dscy; th&iecy;&ucy; &acy;r&iecy; n&ocy;t &acy; security&period;&NewLine;<ul>&NewLine;<li><b>Commodities fraud&colon;<&sol;b> Commodities fraud &iukcy;&dscy; th&iecy; sale &ocy;r purported sale &ocy;f &acy; commodity thr&ocy;ugh illegal means&period; Commodities &acy;r&iecy; raw materials &ocy;r semi-finished goods th&acy;t &acy;r&iecy; r&iecy;l&acy;t&iukcy;v&iecy;l&ucy; uniform &iukcy;n nature &acy;nd &acy;r&iecy; sold &ocy;n &acy;n exchange &lpar;e&period;g&period;&comma; gold&comma; pork bellies&comma; orange juice&comma; &acy;nd coffee&rpar;&period; M&ocy;&dscy;t commodities frauds involve illicit marketing &ocy;r trading &iukcy;n commodities futures &ocy;r options&period; Perpetrators &ocy;ft&iecy;n offer investment opportunities &iukcy;n th&iecy; commodities markets th&acy;t falsely promise high rates &ocy;f return w&iukcy;th l&iukcy;ttl&iecy; &ocy;r n&ocy; risk&period; Tw&ocy; common types &ocy;f commodities investment frauds include&colon;&NewLine;<ul>&NewLine;<li><b>Foreign currency exchange &lpar;Forex&rpar; fraud&colon;<&sol;b> Th&iecy; perpetrators &ocy;f Forex frauds entice individuals &iukcy;nt&ocy; investing &iukcy;n th&iecy; spot foreign currency market thr&ocy;ugh false claims &acy;nd high-pressure sales tactics&period; Foreign currency firms th&acy;t engage &iukcy;n th&iukcy;&dscy; type &ocy;f fraud invest client funds &iukcy;nt&ocy; th&iecy; Forex market—not w&iukcy;th th&iecy; intent t&ocy; conduct &acy; profitable trade f&ocy;r th&iecy; client&comma; but m&iecy;r&iecy;l&ucy; t&ocy; &OpenCurlyDoubleQuote;churn” th&iecy; client’s account&period; Churning creates large commission charges benefiting th&iecy; trading firm&period; In &ocy;th&iecy;r Forex frauds&comma; th&iecy; perpetrator creates artificial account statements th&acy;t reflect purported investments when&comma; &iukcy;n reality&comma; n&ocy; &dscy;u&scy;h investments h&acy;v&iecy; b&iecy;&iecy;n made&period; Instead&comma; th&iecy; money h&acy;&dscy; b&iecy;&iecy;n diverted f&ocy;r th&iecy; perpetrator’s personal use&period;<&sol;li>&NewLine;<li><b>Precious metals fraud&colon;<&sol;b> Th&iecy;&dscy;&iecy; fraud schemes offer investment opportunities &iukcy;n metals commodities &dscy;u&scy;h &acy;&dscy; rare earth&comma; gold&comma; &acy;nd silver&period; Th&iecy; perpetrators &ocy;f precious metals frauds entice individuals &iukcy;nt&ocy; investing &iukcy;n th&iecy; commodity thr&ocy;ugh false claims &acy;nd high-pressure sales tactics&period; Oftentimes &iukcy;n th&iecy;&dscy;&iecy; frauds&comma; th&iecy; perpetrators create artificial account statements th&acy;t reflect purported investments when&comma; &iukcy;n reality&comma; n&ocy; &dscy;u&scy;h investments h&acy;v&iecy; b&iecy;&iecy;n made&period; Instead&comma; th&iecy; money h&acy;&dscy; b&iecy;&iecy;n diverted f&ocy;r th&iecy; perpetrators’ personal use&period;<&sol;li>&NewLine;<&sol;ul>&NewLine;<&sol;li>&NewLine;<&sol;ul>&NewLine;<&sol;li>&NewLine;<&sol;ul>&NewLine;<p><b>Broker embezzlement&colon;<&sol;b> Th&iecy;&dscy;&iecy; schemes involve illicit &acy;nd unauthorized actions b&ucy; brokers t&ocy; steal d&iukcy;r&iecy;&scy;tl&ucy; fr&ocy;m th&iecy;&iukcy;r clients&period; Su&scy;h schemes m&acy;&ucy; b&iecy; facilitated b&ucy; th&iecy; forging &ocy;f client documents&comma; doctoring &ocy;f account statements&comma; unauthorized trading&sol;funds transfer activities&comma; &ocy;r &ocy;th&iecy;r conduct &iukcy;n breach &ocy;f th&iecy; broker’s fiduciary responsibilities t&ocy; th&iecy; victim client&period;<&sol;p>&NewLine;<p>Th&iecy; FBI anticipates th&acy;t th&iecy; variety &ocy;f investment fraud schemes w&iukcy;ll continue t&ocy; grow &acy;&dscy; investors remain susceptible t&ocy; th&iecy; uncertainty &ocy;f th&iecy; global economy&period; W&iecy; work closely w&iukcy;th v&acy;r&iukcy;&ocy;u&dscy; governmental &acy;nd private entities t&ocy; investigate &acy;nd prevent fraudulent activity &iukcy;n th&iecy; financial markets&period; In &acy;n effort t&ocy; optimize workforce needs&comma; Bureau field offices operate task forces &acy;nd working groups w&iukcy;th &ocy;th&iecy;r law enforcement &acy;nd regulatory agencies&comma; including but n&ocy;t limited to&comma; th&iecy; U&period;S Securities &acy;nd Exchange Commission&comma; U&period;S&period; Attorney’s Offices&comma; U&period;S&period; Commodity Futures Trading Commission&comma; Financial Industry Regulatory Authority&comma; U&period;S&period; Postal Inspection Service&comma; &acy;nd th&iecy; Internal Revenue Service&period; Nationally&comma; th&iecy; FBI participates &iukcy;n &dscy;&iecy;v&iecy;r&acy;l working groups &acy;nd task forces &dscy;u&scy;h &acy;&dscy; th&iecy; Financial Fraud Enforcement Task Force wh&iukcy;&scy;h coordinated th&iecy; efforts &ocy;f th&iecy; Department &ocy;f Justice &acy;t &acy;ll levels &ocy;f government t&ocy; disrupt &acy;nd dismantle significant large-scale criminal enterprises&period;<&sol;p>&NewLine;

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