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Is This A Scam? Presentation by Illinois Secretary of State Securities Department.

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Presentation on theme: "Is This A Scam? Presentation by Illinois Secretary of State Securities Department."— Presentation transcript:

1 Is This A Scam? Presentation by Illinois Secretary of State Securities Department

2 Is This a Scam? 1. For a minimum investment of $25, you can buy into a venture that owns 1 million acres of land in Texas – experts say the shares could triple in value.

3 NOT A SCAM The Texas Pacific Land Trust (symbol TPL) is one of the oldest, least-known and most unusual listings on the New York Stock Exchange. It started more than a century ago when the Texas & Pacific Railway company went bankrupt and put 3 million acres of land into the hands of a trustee to manage and sell off when the price is right.

4 Is This a Scam? 2. You see an ad in a national newspaper for an investment opportunity in ‘prime bank’ financial instruments issued by the world’s top 50 banks. The ad claims the opportunity is ‘risk-free, guaranteed by the World Bank and trades in overseas markets’ and will ‘generate monthly returns of 20% to 200%.

5 *SCAM* Whenever you hear or read the term prime bank, watch out. Criminals use it to make their pitch sound legitimate. The pitches usually are vague and sometimes claim regulatory officials would deny knowledge of such financial institutions, according to the Securities and Exchange Commission. The reality is these financial institutions don’t exist.

6 Is This a Scam? 3. Ever consider a career in worm farming? All you need is dirt, a starter kit and some worm stock to get started. For an investment of several thousand dollars to $50,000, you’ll be able to sell your worm stock at $8 a pound or more.

7 *SCAM* In 2003 and 2004, several worm-farm scams slithered across the country, with many investors putting up to $50,000 in the scheme.

8 Is This a Scam? 4. Jojoba, a shrub native to deserts in Arizona, California and Mexico, yields beans with a wax that can be turned into a biofuel. Investment banks offered limited partnerships in jojoba acreage.

9 NOT A SCAM The limited partnerships were sold in the 1980s, but changes in the tax law made them unattractive and ended the investment.

10 Is This a Scam? 5. You can invest in a company that’s salvaging a half-billion dollars of sunken treasure from a shipwreck in the Atlantic off the coast of Europe.

11 NOT A SCAM The public treasure-hunting company, Odyssey Marine Exploration (OMEX), is salvaging such a wreck. Shares of the company, based in Tampa, currently trade for about $4. But be warned: Many treasure- hunting investments really are scams.

12 Is This a Scam? 6. Someone says that you can buy international reply coupons, the equivalent of a self-addressed stamped envelope for overseas mail, and make a bundle by trading them in for US stamps.

13 *SCAM* In fact, this was the original scam that Carlo Ponzi, one of the greatest scam artists in history, began in Although the stamp scheme in fact wasn’t profitable (Ponzi claimed investors would reap a 400% return), enough people believed it to invest with Ponzi. He then paid some of the invested money back to investors, who thought it was a moneymaking enterprise and encouraged more people to be duped. Such swindles are now referred to as Ponzi schemes.

14 Is This a Scam? 7. You get a call from someone claiming to be from the Federal Trade Commission. He says you’ve won the lottery or sweepstakes, but first you must pay federal income tax and insurance before you can receive your winnings.

15 *SCAM* The crooks gain credibility by using Web technology and make it look as though they’re calling from Washington DC and “FTC” even shows up on their targets’ caller IDs. The caller asks the ‘winner’ to wire money or send a check for an amount between $1000 and $10,000. Of course, there is no prize. FYI: Real sweepstakes don’t require you to send money to claim a prize.

16 Is This a Scam? 8. One way to squeeze countries that sponsor terrorism is to not invest in companies that do business with them. Some funds guarantee their investments are free of any firm connected with Iran, Syria, Sudan or North Korea.

17 NOT A SCAM The First Focus Balanced (FOBAX) and Growth Opportunities (FOGRX) funds use a filter to eliminate such companies

18 Remember: Investigate Before You Invest! Call the Secretary of State Securities Department toll free at or visit


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