The SEC has initiated enforcement actions against prime bank promoters. Use the SEC’s Investment Adviser Public Disclosure (IAPD) website and the Financial Industry Regulatory Authority (FINRA)’s BrokerCheck website, and contact your state securities regulator. Even if you personally know the person recommending or selling an investment, check whether he or she is licensed or registered and, if so, whether he or she has any disciplinary history. Many fraudulent investment schemes involve persons who are not licensed or registered as investment advisers or broker dealers. Regardless, investors should be wary of any offer to invest in a high-yield, risk-free international finance program.ĭo not invest your money with unlicensed or unregistered sellers. Promoters may advertise using national newspapers, social media, or classified advertisement websites, and they may avoid using the term “prime bank.” They may explicitly deny that their programs involve prime bank instruments. Promoters may falsely claim that investor funds will be kept safe and protected from loss in an escrow or trust account. Promoters may hire escrow agents or use escrow accounts to receive and disburse investor money.
They cite secrecy if potential investors ask for references, and sometimes ask investors to sign non-disclosure agreements. Often promoters will say or imply that these types of investments are the exclusive, “secret way” that wealthy people make all their money. Promoters may claim that investment opportunities are by invitation only and limited to select, wealthy customers. They also may misrepresent that the instrument is issued, traded, or guaranteed by an international or private bank or trust located abroad. Federal Reserve), or the International Chamber of Commerce (ICC). Promoters may falsely claim that the instrument is issued, traded, or guaranteed by a well-known organization such as the World Bank, the International Monetary Fund (IMF), a central bank (such as the U.S. Promoters may tell investors that they will receive a return of their principal after a few days or weeks and continue to receive their guaranteed return. If someone approaches you about investing in a prime bank program, prime world bank financial instrument, or similar high-yield security, it is a scam.To better protect yourself, be on the lookout for these red flags of prime bank fraud: Keep in mind that the terms used to promote these schemes are just one aspect to scrutinize – in fact, some promoters may avoid using the term “prime bank” entirely. These may include: debenture, standby letter of credit, bank guarantee, prime world bank financial instrument, private funding project, offshore trade or trading program, trading platform, trading facility, trade slot, high-yield trading or roll program, guaranteed bank note, or some variation. Promoters try to make the schemes sound legitimate by using complex, sophisticated, and official-sounding terms. Promoters of prime bank programs often claim that investors’ funds will be used to buy and trade supposed prime bank instruments, and that investors will receive guaranteed, high investment returns with little or no risk. The SEC’s Office of Investor Education and Advocacy (OIEA) is issuing this Investor Alert to warn investors about fraudulent investment schemes involving purportedly high-yield, risk-free international finance programs.Īll “prime bank” investment programs are fraudulent.
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