For the past couple of months, I have been writing about Genius Funds, also known as Genius Investments, which was illegally selling securities through its website, offering investors a rate of return so high it could not possibly have been earned through legal methods.
Now Genius Funds seems to have disappeared, but it turns out there are hundreds more of these types of investment funds being offered to investors online. They belong to a category called High Yield Investment Programs (HYIPs). Wikipedia, the on-line free encyclopedia, makes no bones about it. These are all Ponzi schemes.
By now, people should have a much better understanding about what a Ponzi scheme is after two very high profile cases – one in the US (Bernie Madoff) and one in Canada (Earl Jones). Both men are in jail, after having received maximum sentences, leaving many people without their life savings and little or no chance to recover the money.
So here we have with HYIP’s, in my opinion, hundred of funds being promoted on-line through a whole variety of websites doing just what Bernie Madoff and Earl Jones did. Promising unsustainable returns by paying investors with the money invested by new investors.
Take this one fund called Forex Paid Me. It is offering 5.5% hourly for 19 hours, 13% after one day, 70% after two days, 165% after two days. Just do the math. Not legally possible. Ever.
I plan to write extensively about HYIP’s. Why? Because the barrier of entry is almost non-existent and if Genius Funds is any example, a lot of people are losing money to these types of schemes. Another reason why I want to talk about HYIP’s is because many of these funds offer commissions to individuals who convince friends and family to invest in it– thus causing harm to other people.
BCSC staff ambassadors tour the province, helping people to protect themselves from fraud and unsuitable investments. Our goal is to enable BC investors to develop critical thinking skills so they can become more informed of steps they should take to protect themselves when investing. Where we are this month NanaimoBe Fraud Aware August 12Private event […]