Some examples of fraud in the stock business

The target of investment fraud is also diverse, but most are those who do not have knowledge about investment. Therefore, it is important for anyone to know the forms of deception under the guise of investment. On the other hand, the public must also know what are the conditions for an institution in order to become an investment institution legally. Meanwhile, you can check out Mira Markets fraude to have more info about avoiding frauds in Stock Exchange.

Here are two examples of schemes or the guise of commonly used investment fraud. After that, you will be invited to know more clearly about the legal requirements of investment institutions.

Ponzi Scheme

Ponzi scheme is chained up to be difficult to capture the brain or main players. The trick is that someone offers an investment with a great return. Then the first person who succeeded in being put into this scheme became the right hand and needed to invite others again, and so on.

At first, this person will receive what is promised, which is the profit from the investment. But what the victim does not realize is the profit they receive is money from the next people who invited. If this chain breaks out, then the promised benefits will stop anyway. The first person to build the chain will go with the money already earned from the network under it.

The main culprit or the person who started this is difficult to catch and the one usually caught is the right-hand man. One thing you should remember that Ponzi Scheme is not Multi Level Marketing (MLM). The Ponzi scheme does not have a clear product, either in the form of goods or services. Only the promise of investment with a very high profit.

HYIP Investment (High Yield Investment Program)

This investment model promises high returns. For example, you are invited to invest $ 20,000 with a 20% appointment of business results per month. Then the promised business is a business of coal, oil, or business-based technology that is difficult for you to monitor.

It’s not all HYIP business is a scam, it’s just that you should be more careful if you get an offer to invest. If the investment offers a profit share that is too high, then you should be suspicious.

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