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ICC alert on "Prime Bank Instrument" scams
alerted to watch out for scams
A steady rise in the number of victims of fraudulent high yield investment schemes, has prompted the US Securities and Exchange Commission (SEC) to re-issue an alert detailing warning signs for investors.
The SEC Investor Alert is also appealing to anyone with information on so-called "Prime Bank Instrument" (PBI) scams to contact their Division of Enforcement Complaint Centre.
Victims of PBI frauds are sometimes reluctant to come forward, falsely believing that they are bound by secrecy or confidentiality agreements, or even that they may be liable to prosecution for having taken part in the scam, albeit unknowingly. In fact, investors will be neither sued nor prosecuted for lodging a complaint or cooperating with the authorities to help stamp out these illegal investment programmes.
artists who sell PBIs and similar financial instruments frequently tell
potential victims that they are among the privileged few whose money will
be pooled to invest in secret programmes otherwise reserved for top financiers.
Promoters of the scams often tell investors that regulators and banks
will, of course, deny the existence of the schemes.
SEC website states emphatically that these so-called securities do not
exist and are all scams. You should never invest, it says, if a promoter
ICC's Commercial Crime Bureau (CCB) has repeatedly warned that PBI and similar schemes are little more than pyramid operations. They use the money from one group of investors to show a profit to a subsequent group and, once the final big gamble has been made, the promoters pocket the proceeds and disappear.
"These frauds are still continuing and the number of victims is rising. Recently there has been a significant increase in the use of the internet by fraudsters who are keen to exploit the global exposure the medium gives. Our advice is to check out the legitimacy of any proposed investment scheme with a recognized agency before committing funds," said John Merrett, CCB's assistant director. "This applies especially to schemes promoted on the Internet".
CCB is planning to update its Special Report on Prime Bank Instruments during the next few months to provide members with a comprehensive guide to all the latest scams and their methods of operation
are from the ICC web site:
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