Note: Below you’ll find a fact pattern, using entirely fictional people, that illustrates a type of securities fraud.
Aiesha lives in Brooklyn, NY, and is active in her church. Last June, she was approached by a fellow church member about an investment opportunity that he said was too good to miss.
The man said he was a successful money manager and represented GTF Enterprises, Inc., a firm comprised of “extremely knowledgeable strategists with years of experience working with top financial firms on Wall Street.” Aiesha wasn’t sure what a strategist did but she figured they had to be smart and important.
Aiesha also was told that:
She initially invests $5,000. Each quarter, she receives account statements showing high returns. Based on the account statements, and pressure from other church members, she withdraws all the money from her savings account and invests it with GTF.
But, if it sounds too good to be true… it usually is. Soon, she learns that she has lost her entire life savings. She is a victim of affinity fraud, a type of scam that preys upon members of groups such as religious, ethnic communities, the elderly, or professional groups.