Spotting Investment Fraud

Spotting investment fraud isn’t easy to do. Not if you’re an ordinary investor. And even if you’re a professional.

Yet in instances where average investors are ripped off by Ponzi-scheme advisers, they may be asked to repay alleged “profits” they may have received while the scheme was taking place. Though innocent and unaware of fraud they may be accused by the ensuing bankruptcy trustees of being “willfully blind” about the true nature of the profitable returns they were getting.

But how many investors can really investigate the antics of their advisers? Especially when those advisers had been given clean audit approvals by the S.E.C. in Washington? If the S.E.C. was flummoxed, how can you expect the ordinary investor not to be? (See Earl J Weinreb NewsHole(r) Comments.)