Social media–including Facebook, Twitter and YouTube–and a wide variety of Web sites have become the favored marketplace for high-yield investment programs (HYIPs), which entice investors with promises of safety together with high rates of return–20%, 30%, 100% per day, according to a new investor alert posted on the Financial Authority Regulatory Authority (FINRA)'s Web site.
HYIPs are unregistered investments created and promoted by unlicensed individuals, offering unsustainable rates of return through use of suspect trading strategies, FINRA says. Many operate as Ponzi schemes. The alert says some Web sites purport to monitor and rank programs they consider best, while others promote the products in various ways, even legally suspect ones. Still others, not to be outdone for cynicism, promote specific HYIPs by warning potential investors to avoid HYIP scams.
"But the reality is virtually every HYIP we have seen bears hallmarks of fraud," the alert says. "We are issuing this alert to warn investors worldwide to stay away from HYIPs."
For investors unfortunate enough to have put money in a HYIP, the alert recommends that they not send more money, not refer others to HYIPs and not try to "ride the Ponzi" in the hope of getting in and out before it implodes.
