Protecting the Rights of Investors
High-yield investments may sound too good to be true, often because they are. Some high-risk investors are in a position to risk their investments on high-yield junk bonds that have a high rate of default. Unfortunately, many low-risk investors who are sold junk bonds may never recover from their losses. These losses typically result from unsuitable investment advice or negligence, but may also rise to the level of junk bond fraud.
Zamansky LLC protects the rights of investors. Our securities attorneys investigate claims of high-yield investment losses and aggressively prosecute these cases to recover damages. Investors should contact our Wall Street-based law firm if they suspect they have suffered losses because of a high-yield, high-risk investment.
FINRA’s Investor Alerts about HYIPs
The Financial Industry Regulatory Authority (FINRA) has issued several Investor Alerts warning about high-yield investment programs (HYIP) and scams. These scams may occur through legitimate licensed financial advisors or brokers, but often occur through unlicensed individuals and Internet sites. High-yield investment scams typically involve junk bonds or Ponzi schemes.
FINRA warns investors of common red flags that a high-yield investment is fraudulent:
- High, unsustainable yields: Historically, investments in large corporate stocks return less than 10 percent per year. A higher return may indicate that the investment is actually a Ponzi scheme or a junk bond that may never increase in value and has a high rate of default.
- Unclear methodology: A legitimate securities broker or financial advisor can clearly explain the methods used to achieve returns. A scam may vaguely allude to trading in futures, foreign currencies, energy or metals without solid facts.
- Insufficient information about the broker or operator: Investors should not deal with brokers who do not voluntarily provide details about their credentials and their company and who are not easily reachable.
- Offshore operations: Individuals and firms that offer securities to U.S. residents must be registered with the SEC and licensed by FINRA, which many offshore high-yield junk bond issuers are not.
- Transactions conducted in e-currency: HYIP sites typically require investors to open an e-currency account, which are often unlicensed in violation of federal law.
- Incentives to recruit new investors: High referral bonuses to encourage investors to bring in new investors may be a sign of a Ponzi scheme, which relies upon new streams of money to stay afloat.
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Contact a High-Yield Bond Loss Attorney If You Have Lost Money
We encourage investors who have lost money in high-yield investments to contact Zamansky LLC. Our securities attorneys investigate whether the high-yield investment program was an act of fraud or negligence. Your claims evaluation is free and confidential and we respond to all inquiries within 24 hours.