Signs of investment fraud can include: offers of little to no risk, promises of high returns, and high-pressure sales tatics

ODS - 10/5/2023

Recognizing the signs of investment fraud is crucial in safeguarding your money and making informed financial decisions. Here are some common red flags that should raise suspicion when evaluating investment opportunities:

Promises of Little to No Risk: One of the most telling signs of potential investment fraud is when an opportunity is presented as entirely risk-free or with minimal risk. All investments carry some level of risk, and anyone claiming otherwise is likely trying to deceive you. Be cautious if an investment is touted as "guaranteed," "no risk," or "foolproof."

High-Pressure Sales Tactics: Be wary of aggressive sales tactics that pressure you to make quick decisions without time for due diligence or careful consideration. Scammers may use high-pressure tactics to create a sense of urgency, making it difficult for you to assess the investment's legitimacy.

Promises of High Returns: Unrealistic promises of exceptionally high returns in a short period of time should raise immediate concerns. While investments can yield profitable returns, extraordinarily high profits often come with exceptionally high risks. Scammers may use these promises to lure investors into fraudulent schemes.

Lack of Transparency: Legitimate investment opportunities provide clear and detailed information about the investment, the associated risks, and the issuer. Relevant information should include prospectuses, offering materials, contracts, or agreements. Take the time to verify the truthfulness of the information provided. If the investment lacks transparency, or the details are withheld or unclear, it may be a sign that something is amiss.

Complex Strategies You Don't Understand: Be cautious of investments that employ complex strategies or structures that you do not fully understand. Scammers may use complexity to conceal their true intentions and make it difficult for you to evaluate the risks involved.

Recognizing these signs of investment fraud is crucial for protecting your financial well-being. If you encounter any of these red flags or have suspicions about an investment opportunity, it's essential to conduct thorough due diligence, seek advice from trusted financial professionals, and report your concerns to the Oklahoma Department of Securities, or to the U.S. Securities and Exchange Commission, or other relevant regulatory authorities. Remember that being cautious and informed is your best defense against investment fraud.