How to Tell If Investors Are Fake

When receiving investment information that seems questionable, conduct thorough due diligence. Always confirm registration of investment professionals and firms from official sources like FINRA BrokerCheck or SEC’s Investment Adviser Public Disclosure database.

Don’t invest solely based on an informal conversation or social media post; remember that investing involves an intricate balancing act between risk and return.

Unsolicited Approaches

Unsolicited approaches to investing should always raise red flags. Legitimate investment firms primarily operate through referrals or people searching them out; so if an unsolicited offer to invest arises suddenly it could be a scam.

Unsolicited approaches from prospective buyers who wish to acquire private businesses are sometimes overwhelming for business owners to evaluate and can cause great stress and unhappiness.

Appointing an advisor who has experience helping business owners through the process of selling their company is the ideal approach to selling. They can assist with determining how much information to release to potential acquirers and administer a formal sale process designed to increase purchase price. They may also value your business and advise you how best to protect yourself against unscrupulous buyers; including providing guidance as to which information should be made public and suggesting an acceptable level of confidentiality.


Scammers are experts at disguising themselves as legitimate entities to obtain personal and financial data, including login credentials. When dealing with unknown accounts on social media platforms such as Facebook or Instagram, be wary of slight variations in account name, profile name, email address, screen name or handle of anyone new contacting you; for added safety use reverse image search tools like TinEye to verify authenticity.

If someone you know sends you investment opportunities on social media, ask them to verify their identity “offline.” They may direct you to an official website with more details; be wary if any offer requires payment in crypto currencies that can be difficult to trace back. Be particularly wary if any opportunity requires immediate action or claims the window for investing will soon close; genuine investment firms do not put pressure on investors by placing unrealistic time restrictions on their offerings.

Lack of Documentation

Investing requires access to accurate, timely and transparent documents for investors to make informed investment decisions. Unfortunately, fraudulent actors sometimes use fake versions of public FINRA BrokerCheck reports or registration documentation as bait to lure unsuspecting investors to imposter websites that appear legitimate on Google searches; a quick Google search should reveal any suspicious results; be especially wary if the search results lead to residential homes, fields or an unusual company address – they may indicate fraudster websites promoting microcap stocks (typically smaller companies with lower priced shares that may be vulnerable to market manipulation).

Unrealistic Returns

Always bear in mind that investing is a delicate balance of risk and return. If an offer promises unrealistic returns, be wary – they could be scams!

Scammers may use fake websites to promote fraudulent investment opportunities. Make sure that when verifying a registered investment professional through contact details that can be independently verified such as Form CRS or public records, such as their website listed as being listed or their identity independently verified.

Scammers create an illusion of urgency by suggesting an investment opportunity is limited or will soon expire, and may use tactics such as fake countdown videos in promotional videos to tempt investors into handing over their money without first fully investigating its merits. Legitimate investment professionals never pressure clients into acting quickly.

Raymond Banks Administrator
Raymond Banks is a published author in the commodity world. He has written extensively about gold and silver investments, and his work has been featured in some of the most respected financial journals in the industry. Raymond\\\'s expertise in the commodities market is highly sought-after, and he regularly delivers presentations on behalf of various investment firms. He is also a regular guest on financial news programmes, where he offers his expert insights into the latest commodity trends.

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