investing scams

1. An investment scam that pays early investors with money taken from later investors to create an illusion of big profits. It promises a high rate of return with little risk to the investor. It relies on word-of-mouth, as new investors hear about the big returns earned by early investors.

Ponzi scheme 

1. The process of hiding the source of money obtained from illegal sources and converting it to a clean source, thereby avoiding prosecution, conviction, and confiscation of the criminal funds.

Money laundering

A form of fraud and is one of the most common types of confidence tricks. The scam typically involves promising the victim a significant share of a large sum of money, in return for a small up-front payment, which the fraudster claims will be used to obtain the large sum

  Advanced Fee scam

1. A fraudulent system of making money based on recruiting an ever-increasing number of "investors." The initial promoters recruit investors, who in turn recruit more investors, and so on.

Pyramid Scheme

An excessive trading of assets in a client's brokerage account in order to generate commissions. It is illegal and unethical and is subject to severe fines and sanctions. Brokerages may charge a commission on trades or a flat percentage fee for managed accounts

Churning

1. Fraudsters typically spread false or misleading information to create a buying frenzy that will increase the price of a stock and then decrease shares of the stock by selling their own shares at the inflated price.

Pump and Dump

1. Refers to a fraudulent scheme where individuals or organizations offer coaching services with the intention of deceiving and exploiting their clients for financial gain. The coach may promise unrealistic results or benefits in exchange for a fee or investment, but ultimately fail to deliver on their promises or provide any meaningful value.

Coaching scam

The trading of a company's securities by individuals with access to confidential or material non-public information about the company. Taking advantage of this privileged access is considered a breach of the individual's fiduciary duty.

Insider Trading 

Private investment fund that pools money from high-net-worth individuals and institutional investors. They employ various investment strategies, including short selling, leverage, and derivatives, to aim for superior risk-adjusted returns.

Hedge Fund 

Investors who pool funds to invest in startup companies, typically in exchange for an equity stake

Venture Capitalist