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Tag: Joe Borg

  • INVESTOR ALERT: Statement From Alabama Securities Commission On High-Yield ‘Opportunities,’ Bitcoin, Iraqi Dinars — And More

    EDITOR’S NOTE: This statement from the Alabama Securities Commission is dated March 12, 2014. The PP Blog has applied in-house formatting elements to the statement. Other than that, the statement is verbatim.

    INVESTOR ALERT – Understanding high-risk investments
    What you don’t know CAN hurt you!

    MONTGOMERY, ALABAMA (March 12, 2014) As our state’s and the country’s economy slowly improves, Alabama citizens could still be at risk for losing their hard-earned money to high-risk investment products that guarantee or promote unrealistically high rates of return with little or no exposure to loss. The Alabama Securities Commission (ASC) receives numerous inquiries about exotic-sounding, high-yield investment “opportunities” that, in many cases, are revealed to be unregistered investments touted by unlicensed individuals who employ vague or unrealistic trading strategies.

    And, with the rapid evolution and marketing potential of social media and the internet, investors may be lured by the illusion that most such opportunities are legitimate. The ASC alerts Alabama investors about two current, high-profile, high-risk investment opportunities that have the potential to seriously compromise their personal financial assets if not investigated thoroughly and carefully.

    BITCOIN issues

    Virtual or digital currencies, such as Bitcoin, have recently become popular as an alternative to cash or traditional lines of credit. Bitcoin and numerous other “crypto-currencies,” may be traded on online exchanges for conventional currencies, including the U.S. dollar, or used to purchase goods and services, usually online.

    Unlike traditional currencies, virtual currencies’ value can fluctuate radically according to user demand. In some cases, investors who trade on virtual currency exchanges have experienced trouble redeeming the digital currency or in cashing-out. The potential for fraudsters to use crypto-currencies to perpetrate financial scams is enticing due to the currencies not being issued by a governmental authority or financial institution, and having less regulatory oversight than transactions in conventional currencies.

    “The increasing prevalence of Bitcoin and other digital currencies has provided a fertile environment for financial criminals to make money on the increasing popularity and acceptance of these products,” said ASC Director, Joseph Borg. “The value of Bitcoin and other crypto-currencies can be highly volatile and investors should be aware that investments that incorporate ambiguous money systems can lead to very real risks, including the potential to lose one’s money!”

    Iraqi Dinar issues

    The Iraqi dinar “investment opportunity” is a scam that has existed for more than a decade and has regained some of its former popularity. As with many foreign exchange currency trading frauds, the dinar investment opportunity is often pitched as a “can’t miss” method by which the interested investor can profit from a severely undervalued Iraqi currency that is “certain” to appreciate in value in just a short time.

    Fraudsters engaging in the dinar scam promise that extravagant profits can be realized if the investor buys the dinar at today’s values, typically 1,000 or more dinars to one U.S. dollar. The investor then exchanges the dinars for dollars at a later date, once the dinar exchange rate has improved.

    ASC Director Borg cautions that foreign exchange currency trading is very risky for main street investors.

    “Often, promoters of foreign exchange currency trading schemes, such as those involving the Iraqi dinar, lure investors with the promise of “control” over a large amount of foreign currency with a relatively small initial outlay. Fraudsters often predict inevitable increases in the currencies’ value, which will supposedly lead to huge returns over a short time, with little or no downside risk.”

    According to Borg, investors should not be fooled by the promise of easy money.

    “As with any traded commodity, investing in foreign currencies can be extremely risky and generally unsuitable for all but the most seasoned investors who can afford the high risk.”

    Commodity trading platforms are subject to federal and state regulations; potential investors may contact the U.S. Commodity Futures Trading Commission (CFTC) at www.cftc.gov for more information; check registration status and disciplinary history of commodities at the National Futures Association (http://www.nfa.futures.org/) or call NFA at 800-676-4632; and contact the ASC at www.asc.alabama.gov or call 1-800-222-1253 to determine if an investment opportunity and the person making the office are properly registered.

    What you can do

    The Alabama Securities Commission encourages all Alabama citizens to learn and incorporate
    sound and proven investment techniques as a means to grow and safeguard their personal financial assets:

    • Check and verify. Before you buy, always independently verify with state and federal regulators who you are dealing with and whether the seller of the investment opportunity and the product is properly registered.
    •  Exercise skepticism. Be aware that many individuals who offer strategies for getting rich quickly make their money on the sales of their books or seminars. Ask yourself why they’re sharing their secrets with you instead of keeping it to themselves.
    • Beware of guarantees. Be suspect of anyone who promises or guarantees an investment will perform a
    • predictable way or will generate consistent or unreasonable returns.
    • Be suspect of complex strategies. Avoid any investment opportunity that touts complex or exotic-sounding techniques to achieve unusual success. Investors should be able to clearly discern what kind of opportunity is being offered; who is offering it; how does it make money; what is required to get your money out of the investment; and what are the risks.

    Avoid pushy salespeople and claims of urgency. No reputable financial professional should pressure you or insist that you “act now” when considering an investment opportunity. If it is such a good deal today, it will be a good deal tomorrow—after you have had a chance to check and verify.

    Contact the ASC with inquiries concerning securities broker-dealers, agents, investment advisers, investment adviser representatives, financial planners, registration status of securities or debt management programs, to report suspected fraud or to obtain consumer information. The ASC provides free investor education and fraud prevention materials in print, on our website and through educational presentations upon request.
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  • Joe Borg Of Alabama Securities Commission Tells WSFA That Profitable Sunrise Worked Because People ‘Kind Of Glossed Over The Mathematics’

    Joe Borg of the Alabama Securities Commission. From: WSFA news report.
    Joe Borg of the Alabama Securities Commission. From: WSFA news report.

    EDITOR’S NOTE: Alabama was one of the first U.S. states to take action against the Profitable Sunrise HYIP “program,” issuing both an Investor Alert and a cease-and-desist order last month. The C&D lists two alleged “agents” of Profitable Sunrise, demonstrating that a “program” can create problems for pitchmen, perhaps even as the “program” operators make a getaway or disappear into the darkest corners of the Internet.

    Profitable Sunrise had at least five purported investment plans, including one dubbed the “Long Haul” that promised a payout of 2.7 percent a day.

    Whether the bizarrely named “Long Haul” plan was a deliberate taunt at regulators and possibly even the pitchmen who helped the scheme gain a head of steam remains unclear.

    Listed as agents in the Alabama order were Melton McClanahan and Adam York. “An investigation of the company’s actions revealed that the men allegedly promoted at least five different ‘investment plans’ through a website used to promote Profitable Sunrise investment program and disseminate information to potential investors regarding the company’s various investment opportunities,” the Alabama Securities Commission said in the order.

    Also listed in the order were purported Profitable Sunrise operators Roman Novak and Radoslav Novak. In a complaint last week, the SEC said that “Profitable Sunrise operates for the benefit of unknown individuals and/or organizations doing businesses through companies formed in the Czech Republic and using bank accounts in the Czech Republic, Hungary, Latvia, and China, among other places.”

    ____________________________________

    Joe Borg of the Alabama Securities Commission (ASC) has dealt with massive fraud schemes that traded on faith, including the Greater Ministries International Church caper in the 1990s that led to criminal convictions against five individuals.

    Back in 1999, ASC and the Ohio Division of Securities filed a joint complaint in federal court in Florida to shut GMI down. The purported “opportunity” took in more than $550 million by touting “divinely-inspired investments in the foreign currency market and gold, silver and diamond mines in Africa and the Caribbean,” ASC said at the time.

    Now, Borg and other state and provincial regulators are tacking the Profitable Sunrise scheme, which traded on faith and promised absurd returns.

    “I think because they used a per-day percentage, people kind of glossed over the mathematics,” Borg told WSFA.

    WSFA.com: News Weather and Sports for Montgomery, AL.

  • URGENT >> BULLETIN >> MOVING: Alabama Issues Warning On ‘Profitable Sunrise’

    breakingnews72URGENT >> BULLETIN >> MOVING: The state of Alabama has issued a warning on Profitable Sunrise. The move follows on the heels of a cease-and-desist order issued last week by North Carolina.

    The warning comes in the form of an “investor alert” issued by the office of Joseph Borg, the director of the Alabama Securities Commission.

    “We want to make our citizens aware of the potential perils of web-based investment marketing,” said Borg. “As with all investment opportunities, investors should thoroughly scrutinize any offer, especially if it comes from a foreign country,” Borg said. “Most investment offerings, as well as the person making an investment offering, must be registered with the Alabama Securities Commission. This is a critical first step in protecting the public from con artists and investment fraud.”

    Borg urged “anyone in Alabama who has invested with Profitable Sunrise to contact the ASC’s Enforcement Division at 1-800-222-1253.”

    From ASC (italics added):

    An investigation of Roman Novak, Radoslav Novak and their company, Inter Reef, Ltd., doing business as Profitable Sunrise, revealed that the men allegedly promoted at least five different “investment plans” through a website that offered rates of return ranging from 1.6% per business day to 2.7% per business day for periods of from between 180 to 240 business days. Investors were told that their money would be used to fund short-term, “risk-free” loans to businesses, and that “all funds deposited with us are insured against loss” by a leading investment bank. Further investigation revealed that victims had been instructed to wire money to financial institutions in Eastern Europe, including one bank identified as being in the Czech Republic. ASC records revealed that neither of the men, nor the company they represent, are registered to conduct securities business in Alabama, as required by the Alabama Securities Act.

    Read the ASC warning.

  • RECOMMENDED READING/VIEWING: Washington Post/Bloomberg Report On ‘The Ponzi Schemer Next Door’; FINRA/AARP Share Tale Of Purported ‘Bank President’ Who Lured Victims While ‘Craving Cocaine’ At Pay Phones From Which He Set Up Marks

    This man purported to be a bank president. In reality, he was an investment fraudster who used pay phones to lure people into scams as he was craving cocaine, according to a remarkable video airing on the Internet and PBS stations.

    The Washington Post and Bloomberg published Bob Carden’s story about how smart people get sucked into investment scams. The story is titled, “Investment fraud isn’t relegated to Wall Street: Beware the Ponzi schemer next door.”

    Carden produced the video “Tricks of the Trade: Outsmarting Investment Fraud.” Editor John Warnock assembled the package, which shows some of the things FINRA and AARP are doing to educate the public about the plague of fraud schemes and how to avoid them.

    Read the story here.

    And make sure you set aside some time to watch Carden’s pointed video (below), which is running on New Hampshire Public Television and elsewhere. The video shows footage of actual scammers talking about how they plied their trade and includes audio of scammers making pitches, including rude ones. You’ll learn about the buttons they push, the manipulation tactics they employ and how people who would seem to know better get duped.

    The video features commentary from psychologist Robert Cialdini, commentary from fraud victims, commentary from fraud perpetrators and commentary from fraud-busters, including Joe Borg of the Alabama Securities Commission.

    Borg, among other things, is famous for prosecuting the case against Greater Ministries International, a colossal Ponzi scheme that traded on faith and operated from Florida.

    Among the many interesting things in the video is footage from the old Candid Camera TV show in which passersby were persuaded the entire state of Delaware was “closed.”

    Watch the full episode. See more Making Sense New England.