First up, we have the Ponzi Scheme. I’m trying to have this one renamed the Madoff Scheme – even the guy it’s currently named after didn’t invent it, it’s been around for as long as people have gathered in groups and pooled resources for profit making activities. Anyways, I think Madoff Scheme should be the new name for the Ponzi Scheme.

The Hook: the crooks promise high returns and NO risks with proprietary or secret investment strategies. Early investors are paid large returns with money from new investors. Word spreads, the initial investors recommend it to friends and family and the scheme continues to spread.

Tip Offs: You know high returns and no risks aren’t feasible. We can control risk but not eliminate it. The scheme typically exhibits unusually consistent and high returns for vested investors, secret or exceedingly complex strategies, lack of regulation of the sellers (or multiple tiers of sellers) and excuses instead of details when you ask to see promises in writing or earnings statements.

Next up we have the Pump and Dump. Though highly illegal, the internet has made it easy and lucrative and the organizers plan to be long gone before the feds get wind of it. It’s commonly associated with the Penny Stock Markets since a 15 year-old boy ran a scheme in 2000 that is estimated to have netted him (after he paid the fines) of over half a million dollars. It's now also in the Crptocurrency space.

The Hook: Insider is willing to share some inside information about a stock or crypto currency, which they use to lure people into buying it.

The desire to make money fast is tempting to many investors, who fall for the email-spamming techniques swindlers’ use, which include subject lines like “Don’t you dare take your eyes off this one!” or “Catch the new leader in clean energy!” or “this coin is about to pump to the moon!”

Currently, this scam is big in the green-technology sector. Promoters play up compelling macro themes like the rise of solar, wind, and other alternative or renewable energy sources.

The promoter convinces you that some tiny stock has a game-changing technology, a huge untapped market, or a big government contract about to fall in its lap.

The insiders (and marketing firms they hire to do the promotions) purchase blocks of a stock before they recommend it to thousands of investors. The stock price spikes, and quickly falls but the promoters sell when the price peaks and bank huge profits.

A variation on this scam, called the short and distort, involves a smear campaign to drive down the price of the stock and then profit by short-selling.

Tip Offs: Most pump and dumps focus on small Pink Sheet companies since they tend to be easier to manipulate since there's very little public information about the company. Plus, a low per-share price allows them to make big profits on 10, 15 or 25 cent price increases (or decreases). Other characteristics include emails with unrecognizable “from” fields, impudent promises (how would a stock gain 300% in one day?), no contact information for the email sender, excessive use of exclamation points, forecasts of fast, exponential growth, and no actual product but a promise that “the prototype is coming soon!”

You know the rules – if it sounds too good to be true...

Stay vigilant, protect your assets and retire on time with me and my slow and steady growth plan.

No hype, transparent LIVE TRADING track records and an office in Houston you can come visit anytime (with an appointment).

Thanks,