Millennials : Common sense Vs Risk Appetite

Millennials : Common sense Vs Risk Appetite, Common Red Flags of Fraud

Millennials : Common sense Vs Risk Appetite


One word of caution. Many traditional Fraudulent Schemes, sadly not well known in some age groups,  like the old "Ponzi scheme" have also been targeting millennial with new and revamped methods, fancy .io or .ai domains and have also disguise them selves under the fintech and crypto umbrella as new ventures. It is always prudent to be caution and apply common sense by all means when evaluating trust regardless of risk appetite.

Ponzi schemes Using virtual Currencies

Bitcoin Ponzi Scheme. In a recent case, SEC v.Shavers, the organizer of an alleged Ponzi scheme advertised a Bitcoin “investment opportunity” in an online Bitcoin forum. Investors were allegedly promised up to 7% interest per week and that the invested funds would be used for Bitcoin arbitrage activities in order to generate the returns. Instead, invested Bitcoins were allegedly used to pay existing investors and exchanged into U.s. dollars to pay the organizer’s personal expenses

  • High investment returns with little or no risk.every investment carries some degree of risk, and investments yielding higher returns typically involvemore risk. “Guaranteed” investment returns or promises of high returns for little risk should be viewed skeptically. 
  • Overly consistent returns. Investments tend to go up and down over time, especially those seeking high returns. Be suspect of an investment that generates consistent returns regardless of overall market conditions.
  • Unregistered investments. Ponzi schemes typi-cally involve investments that have not been registered with the seC or with state securities regulators.
  • Unlicensed sellers. Federal and state securities laws require certain investment professionals and their firms to be licensed or registered. Many Ponzi schemes involve unlicensed individuals or unregis-tered firms.  
  • Secretive and/or complex strategies and fee structures. It is a good rule of thumb to avoid investments you don’t understand or for which you can’t get complete information.
  • No minimum investor qualifications. Most legiti-mate private investment opportunities require you to be an accredited investor. You should be highly skepti-cal of investment opportunities that do not ask about your salary or net worth.
  • Issues with paperwork. Be skeptical of excuses regarding why you can’t review information about the investment in writing. Always read and carefully consider an investment’s prospectus or disclosure statement before investing. Be on the lookout for errors in account statements which may be a sign of fraudulent activity. 
  • Difficulty receiving payments. Be suspicious if you don’t receive a payment or have difficulty cashing out your investment. Ponzi scheme organizers some-times encourage participants to “roll over” promised payments by offering higher investment returns.
  • It comes through someone with a shared affinity. Fraudsters often exploit the trust derived from being members of a group that shares an affinity, such as a national, ethnic or religious affiliation. sometimes, respected leaders or prominent members may be enlisted, knowingly or unknowingly, to spread the word about the “investment.”



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