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Oil & Gas Fraud is Among Forbes’ “Top Money Scams”

December 14, 2016 Blog

“In investing . . . prevention is half the game.” This advice comes from author and Forbes contributor John Wasik in his recent article, How To Avoid The Top Money Scams.

The investment market for individual investors has long been plagued by fraud. From the early days of Ponzi schemes to the recent resurgence of boiler rooms targeting vulnerable investors, those seeking to grow their wealth have always needed to make careful, informed decisions in order to avoid becoming victims of fraud.

Recently, oil and gas investment scams have become the preferred tools for many fraud artists seeking to bilk unsuspecting investors out of their hard-earned savings. Based upon a review of the North American Securities Administrators Association (NASAA)’s 2016 Enforcement Report, the Forbes article identifies oil and gas investment scams as one of the five leading fraud risks facing individual investors today.

Five Leading Fraud Risks for Individual Investors

As listed in both the Forbes article and NASAA’s 2016 Enforcement Report, oil and gas scams rank third among the top five fraud risks for individual investors:

  1. Ponzi Schemes – Along with boiler room scams, Ponzi schemes have also been making a comeback. These schemes, which are often run by unregistered brokers and advisors, involve investors paying into a fraudulent brokerage account and receiving falsified “profits” that are paid using subsequent investors’ funds.
  2. Real Estate Investments – Real estate investment trusts (REITs) and other real estate investments present high fraud risks as well, with investors frequently losing money due to a wide range of fraudulent and other improper practices.
  3. Oil and Gas Investments – Master limited partnerships (MLPs), commodity futures and options, oil company stocks, and oil and gas funds all present potential fraud risks for individual investors. With the recent volatility in the oil and gas markets, many scams seek to target investors hoping to secure quick and high-margin returns.
  4. Internet Fraud – The Internet has made it far easier for scam artists to target individual investors. Unsolicited emails offering oil and gas investments and other “opportunities” for investing are often part of fraudulent scams.
  5. Affinity Fraud – Internet, phone and mail scams often target particular groups, such as recent retirees, those with a particular religious or community affiliation, and elderly investors. These “affinity” frauds rely on establishing a level of trust in order to subsequently pitch illegitimate investments in oil and gas, alternative energy, and other sectors.

In a separate list entitled, Top Investor Threats, NASAA once again ranked oil and gas investment fraud third – this time behind unregistered offerings and short-term promissory notes being pitched to individual investors.

Have You Lost Money in an Oil & Gas Investment Scam?

If you have lost money in a fraudulent energy investment, the investment fraud attorneys at Zamansky LLC may be able to help. With offices located in the heart of Wall Street, Zamansky LLC represents individual investors nationwide. To learn about the options that are available, call (212) 742-1414 or request a free, confidential consultation online today.

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