A Bonds Brokers Scam is a scam in which a scammer poses as an experienced bond broker, and promises free research reports, gifts, or discounts on dealing charges. The scammer then tries to get you to invest in a stock of a non-existent company, or offers to buy your shares for a much higher price than market value.
Bearer bond scams
A bearer bond scam involves selling a bond that has no value. These bonds are sold for a fraction of their cover price, and when investors go to redeem them they find out that they were scammed. This can lead to criminal charges. Luckily, there are ways to protect yourself from falling victim to a bearer bond scam.
Be aware that bearer bonds are a common form of scams. It’s important to understand the risks of these investments, so you can avoid becoming a victim. In many cases, these bonds are made out to companies or named individuals. This makes them anonymous and makes them ideal for money laundering and tax evasion. Bearer bonds have a higher interest rate than savings accounts or money market accounts, which makes them ideal for hiding income or avoiding taxes.
High Yield Investment Programs
High Yield Investment Programs (HYIP) are unregistered investment vehicles that promise investors high returns with little risk. However, these programs are often scams run by unscrupulous individuals. Often, they use money from new investors to pay off older ones. They are not to be confused with the legitimate high-yield bond investments, which actually offer higher interest rates than investment grade bonds.
High Yield Investment Programs and Bonds brokers scams usually promise high returns on investments, but this is not always the case. Often, these programs will make unrealistic promises, such as claiming that you will earn tens of thousands of dollars in a year by investing a certain amount. They will also make false claims about their business and profits.
Bearer bond price manipulation
A bearer bond price manipulation scam is one that involves selling a bond that does not have any value. The investor then realizes that the bond was fraudulent when they go to redeem it. The scam is incredibly difficult to detect. This type of investment is illegal in the United States and can result in criminal charges.
The downside of this kind of investment is that there are no tax implications and there is no way for the owner of the bearer bond to declare his or her profits. Therefore, bearer bonds are used by dishonest people to avoid taxes. The lack of transparency also allows the owners to hoard or move their wealth around without the risk of being discovered.
Beware of unsolicited calls from brokers
When you receive unsolicited calls from bonds brokers, you should be wary. This type of salesperson may use any form of contact to solicit your business. You should also be suspicious if the caller offers free gifts or lunch. This type of salesman may also push you to invest blindly. Avoid unsolicited calls from brokers who use high-pressure sales tactics and pushy information.
Some brokers make money through markups or sales commissions. This means that the more you buy and sell through them, the higher their earnings will be. This practice is known as churning and is a red flag. If you have suspicions, contact the Office of Securities.