Warning Signs an Investment Group Is a Pyramid Scheme
If you are considering investing in a get-rich-quick project, beware. Many of these are masquerading as investment groups but are actually Pyramid schemes.
At Meissner Associates, we are committed to protecting investors from business ventures that will ultimately result in a financial loss. Below, we have outlined some of the tell-tale signs that the organization you are interested in is actually a pyramid scheme disguised as a high-powered, high-return investment group.
The purpose of a legitimate investment group is to invest in a project that will generate profit for the team of investors. The investors are supposed to work together to achieve the highest return on their initial investment.
Pyramid schemes are similar to Ponzi schemes in that investors buy into investment management programs to achieve a profit return but are actually paid with the income provided by new investors rather than through successful investments.
In a pyramid scheme involving securities fraud, the fraudster sits at the top of the pyramid and each consecutive tier is comprised of unsuspecting victims. The only way an investor will achieve the highest profit return is through recruitment of new investors.
You can assume that if an investment group you are interested in becoming a part of places great importance on the recruitment of new investors and less of a focus on the projects you are investing in, that it is probably a pyramid scheme.
Promises of Fast Returns
When an investment group presents a project that promises a top return on your investment in a short period of time, you should question the authenticity of the project. Maximizing your profits doesn’t happen overnight in any business dealing.
Chances are, if the investment group is putting an emphasis on fast cash for your investment and a greater profit in recruiting new investors, it’s a pyramid scheme.
Consult with a Pyramid Scheme Attorney
Promises to earn money fast and generate an income that will provide you and your family with the lavish lifestyle you’ve always dreamed of can be tempting. Thousands of innocent people fall victim to these deceptive guarantees every day.
Pyramid schemes misrepresenting themselves as legitimate investment groups are unable to sustain themselves in the long run and almost always fall apart.
If you believe you have been conned into investing in an illegitimate investment project, contact an experienced whistleblower attorney at Meissner Associates. Schedule your free and confidential tip evaluation today by filling out our contact form below or by calling us at 1-866-764-3100.