It’s imperative to avoid commodity fraud and its criminal and civil repercussions. A skilled lawyer can fight for your rights and negotiate plea deals. Bukh Law Firm, PLLC, can also help you navigate court procedures to help avoid conviction. Contact us today to discuss your options. We have over twenty years of experience in helping clients avoid criminal charges.
Avoid fraudulent websites
Be cautious about investing your hard-earned money in commodity futures and options. While it may be tempting to take advantage of the low prices, this can be a dangerous strategy. It is important to read the fine print before you make a decision. The CFTC warns that there have been an increase in fraudulent websites promoting commodity trading systems and advisory services. These websites usually use misleading advertising to attract investors. The advertised performance results are typically hypothetical or are based on fake trading. The CFTC warns investors to be skeptical of these claims and to be cautious of those who claim to be experts in their field.
There are serious consequences for engaging in commodities fraud. This type of fraud is illegal and can lead to criminal and civil consequences. Fortunately, you can hire an experienced commodities fraud attorney to protect your legal rights. Whether you’re charged with fraud, or are looking for information on how to avoid committing the offense, the Bukh Law Firm, PLLC is here to help. We can help you protect your rights and get you the best possible outcome in your case.
Avoid high-pressure sales tactics
It is important to avoid high-pressure sales tactics when investing in physical precious metals. Even legitimate investment professionals shouldn’t pressure their clients to make a quick decision or “act now.” Avoid unsolicited telephone calls, which often employ persuasion tactics and the phantom-riches technique. These tactics are used to convince people to invest in a product they don’t fully understand. Another common tactic is the scarcity card, which uses limited quantities of a product to justify the price.
Avoid Ponzi schemes
To avoid the pitfalls of commodities fraud and Ponzi schemes, investors should be wary of the companies they deal with. Most Ponzi schemes collapse when it becomes difficult to recruit new investors and a significant number of investors start pulling out. One famous example of this was Charles Ponzi’s scheme, which collapsed when The Boston Post began investigating the returns and a large number of investors started pulling out of their investments.
Ponzi schemes usually involve unlicensed investment professionals and unregistered investment firms. Security laws require investment professionals to be licensed. Another red flag is the lack of transparency and access to paperwork. The NFA warns investors not to deal with such companies. In addition, investments marketed as “guaranteed” are suspicious.
Ponzi schemes are extremely difficult to detect. Their main aim is to trick investors into believing they can make a huge amount of money with no risk. They rely on phony statistics and research to lure investors. In fact, Bernie Madoff engineered a $65 billion Ponzi scheme, of which only a few investors managed to recover their money. Many of the victims were charitable organizations and other institutions.
Avoid market manipulation schemes
Market manipulation is a practice that undermines the integrity of the market by taking advantage of investors. It can involve a number of actions, including buying shares to artificially boost prices or targeting other traders. Some types of market manipulation also involve pump-and-dump schemes, which create a false demand for a commodity and sell it quickly, taking advantage of uninformed buyers.
Market manipulation is illegal. US securities law defines it as any activity that artificially increases or decreases a price. In other words, any activity that distorts the market, even when unrelated to the actual commodity or market, is illegal. The US Securities Exchange Act prohibits such activities, and the US government has taken a strong stance against them.
In addition to commodities, financial market manipulation includes pump and dump schemes. In these schemes, stock promoters induce company affiliates or large non-affiliates to release a large number of shares. These fake shares are then used by the promoter to artificially increase or decrease a security’s price.