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Look Out for High-Yield Investment Program Scams -- Investor Alert

March 15, 2023

The SEC’s Office of Investor Education and Advocacy warns investors that websites promoting High-Yield Investment Programs are likely scams.

Have you ever seen a website promising annual (or even monthly, weekly, or daily!) investment returns of 30 or 40 percent – or more?  The hallmark of a high-yield investment program (HYIP) scam is the promise of incredible returns with little or no risk to the investor.  If you come across an investment program that promises high returns with little or no risk, be aware that it is likely a fraud.

HYIPs typically involve unregistered offerings.  In general, unregistered offerings are not subject to some of the disclosure requirements and other regulations that registered offerings are subject to, which are designed to protect investors.  Also, fraudsters may use unregistered offerings to conduct investment scams.  It’s important to research investments before investing.

Many fraudulent investment schemes involve individuals who are not licensed or registered.  HYIPs typically are run by unlicensed, unregistered individuals.  Check whether anyone offering or selling an investment is licensed or registered.  You can do this by using the free and simple search tool on Investor.gov. 

SEC enforcement action.  In SEC v. Karpavicius, the SEC charged defendants whose websites claimed that their mutual funds launched in 2015 and have since enjoyed a “50% + Average annual return for the last 5 years.”  The SEC alleges that one of the defendants’ websites displayed images of purported executives with links to fictitious biographies available on a prominent social media website:Puroirted Executives

The websites also allegedly included graphs to illustrate purported performance of the defendants’ fictitious mutual funds:

Websites

Anytime you encounter an investment “opportunity” guaranteeing high returns with little or no risk, do not hand over your hard-earned money.  Instead, report it to the SEC. 

Additional Resources

HoweyTrade

Click on the image above to learn about the Office of Investor Education and Advocacy’s initiative to provide a compelling and interactive way to help educate investors on how to avoid investment fraud.

Social Media and Investment Fraud – Investor Alert

Investor Alert: “Prime Bank” Investments Are Scams

Report possible securities fraud to the SEC online at www.sec.gov/tcr.

Protect your hard earned money – learn more tips on investing wisely and avoiding fraud at Investor.gov.

Call the SEC’s Office of Investor Education and Advocacy (OIEA) at 1-800-732-0330, ask a question using this online form, or email OIEA at Help@SEC.gov.  Receive Investor Alerts and Bulletins by email or RSS feed.

This Investor Alert represents the views of the staff of the Office of Investor Education and Advocacy. It is not a rule, regulation, or statement of the Securities and Exchange Commission (“Commission”). The Commission has neither approved nor disapproved its content. This Bulletin, like all staff statements, has no legal force or effect: it does not alter or amend applicable law, and it creates no new or additional obligations for any person.

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