THERE seems to be three kinds of people who respond to solicitations for an investment scam.
The first is someone who apparently has not read a newspaper, listened to a radio broadcast, or watched television in the last year. This kind of investor must believe that the returns being promised by the scammers are normal, and it is just that he has not heard of such wonderful opportunity before.
The second type is convinced, as in the words of one “successful” investor, that “this company is, indeed, a blessing to me and my family,” as if the Divine Powers have finally rewarded his faith and good behavior.
The third may be like the shoplifter who decides to steal a pair of expensive sunglasses in a department store. This person understands that it is not all that it is presented to be and that there is a risk involved, but nonetheless decides that he is either lucky enough or smart enough not to get caught.
Of course, the key to success for investors in a fraudulent investment scheme is to be there first. By the time a few hundred people have posted pictures of their new cars earned from their “investment” on their Facebook pages, it might be time to wait for the next scam to be able to be at the top of the line.
However, the investment scams that make it to the evening television news and the front pages of newspapers are only part of the problem.
The Securities and Exchange Commission (SEC) warned last week that two more companies are violating the law by soliciting investments without proper registration and licenses. The firms have not been found to be fraudulent, but there is a strong possibility of another scam, because they do not have any legal basis for taking in investors’ money. The problem is that too many investors are not aware of what makes companies like them legal. People just assume that if a corporation has been registered with the SEC and has been issued local permits, it must be operating legally. Nothing could be farther from the truth.
If you are willing to take your chances with a potentially fraudulent firm, that is your choice. But serious and prudent investors will first contact the SEC to verify the legality of the company and its operation. A legitimate company will welcome, and even encourage, that sort of due diligence.
However, even the appearance of legitimacy may conceal a potential investment loss. The SEC just advised the public that the corporate life of Capitol Hills Golf & Country Club Inc. in Quezon City expired in 2010, and that its license to offer or sell securities was revoked in 2004. The company is undergoing liquidation proceedings before the Regional Trial Court in Quezon City, and current club share owners are trying to unload their ownership on the public.
If anything raises your doubts as to the legitimacy of an investment, do not proceed without checking with the SEC.
Image credits: Jimbo Albano
1 comment
Plain greed !