Saturday, April 13, 2013

Be cautious about unregulated investment schemes

When someone markets an investment to you, and tell you about the attractive return that you can get, you have to be very careful. Quite likely, they are exaggerating return to attract you. If you are greedy, and not careful, you will part with your money and may not get it back.

If the marketeer knows that the statements are false, he or she is dishonest. Quite often, the marketeer may be a young person who has just started work, and is taught about the sales pitch. This person (who may be a relative or friend) is not aware that the statement is false. The marketeer is not dishonest, but is gullible and naive, and so is the customer who buys the product.

The marketing of investments without registering a prospectus is illegal, under the law. The marketing of "pay back schemes" is also illegal, as it is tantamount to deposit taking, and a license is required.

In recent years, the people in charge in the regulatory agency did not  know how to deal with these illegal operations, so they have not taken steps.

One day, and I hope in the near future, they will realize that it is their duty to act, and many people will then be arrested. Do not fall in the trap, thinking that the lack of action by the regulator means that the investment scheme has been approved, or is legitimate.

1 comment:

sgcynic said...

I hope the people in charge in the regulatory agency are sacked for dereliction of duty and for causing undue hardship and anguish among the people

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