Fraudstersoffer shares to the public without a prospectus through boiler room fraudsters.
Unauthorised businesses carries a great deal of risk to the public.
What is it ?
New type of Fraud:
Boiler room: The criminals employ high pressure sales tactics
Boiler rooms operations are share scams and are the scourge of investors.
The operator will sell worthless shares at inflated prices to investors that are impossible to sell.
The company they are share dealing in will probably be listed on an illiquid market, so the shares cannot be sold, and the price will be hugely inflated.
Insider dealing involves criminal elements. It is a sophisticated scheme that involves criminal behaviour aiming to profit from exploiting confidential and price sensitive information.
Financial Crimes-Market Abuse-Insider Trading:Cases
Insider dealing and money laundering are serious crimes.
High returns with little or no risk. Every investment carries some degree of risk, and investments yielding higher returns typically involve more risk. Be highly suspicious of any "guaranteed" investment opportunity.
Overly consistent returns. Investments tend to go up and down over time. Be skeptical about an investment that regularly generates positive returns regardless of overall market conditions.
Unregistered investments. Ponzi schemes typically involve investments that are not registered with the SEC or with state regulators. Registration is important because it provides investors with access to information about the company's management, products, services, and finances.
Unlicensed sellers. Federal and state securities laws require investment professionals and firms to be licensed or registered. Most Ponzi schemes involve unlicensed individuals or unregistered firms.
Secretive, complex strategies. Avoid investments if you don't understand them or can't get complete information about them.
Issues with paperwork. Account statement errors may be a sign that funds are not being invested as promised.
Difficulty receiving payments. Be suspicious if you don't receive a payment or have difficulty cashing out. Ponzi scheme promoters sometimes try to prevent participants from cashing out by offering even higher returns for staying put.
Funds are deposited directly with the investment adviser and not in a separate custodian accoun
Funds are deposited in a broker-dealer that is an affiliate of the adviser.
Monthly brokerage statements are sent by the adviser and not the custodian.
Adviser's investment returns are consistently good, even in a volatile economy.
Adviser's returns are consistently the same, year after year.
Adviser's investment strategy is complex and not clearly explained.
Adviser's investment strategy is not compatible with either your short-term or long-term goals.
Adviser claims you are now part of an exclusive club. Exclusivity is not a benefit when trusting someone to manage your money. It is just another red flag.
Your adviser shares your views regarding politics, religion, sports, etc.
The one fact consistent with nearly all victims of a Ponzi scheme is that they failed to perform the proper due diligence, and, in some cases, did not perform any due diligence.
Many were led by a trusted intermediary from their church, country club, affinity club, etc., who was also led to the belief of consistently high annual returns without doing their own due diligence.
Promoters are not registered to sell investments (Consider doing a background check through Financial Industry Regulatory Authority (FINRA) if the promoter is U.S. based.)
Promoters have a history of being investigated and/or disciplined for actions related to investments (Google is your best friend for this one.)
Promoters and/or founders of the business/investment have criminal, bankruptcy, or civil court histories that are troubling (Use PACER to search all federal court records for a nominal fee. State courts generally have their own online systems, and access to them is growing daily.)
Difficulty in verifying whether there is a legitimate business behind the investment (Again, Google is your friend!)
Groundbreaking “new technology” or other special (but super secret) methods or assets, which are going to take the world by storm and be the greatest thing since sliced bread
Complicated alleged business model that prevents an experienced investor from understanding how money is really made.
The alleged performance of the company is suspiciously higher than competitors or companies in related industries
No objective third-party information can be found about the company
Elaborate explanations for why the business cannot be verified
Unusually high rates of return offered on the investments (Note that this one is the most common across all Ponzi schemes.)
Returns on investment are guaranteed (Not to be confused with an annuity from a reputable company with a guarantee in the contract.)
Promoter downplays the amount of risk investors will be exposed to, often using phrases such as “a sure thing”
Reluctance to provide documentation supporting claims being made about the investment and the business behind it
Address of the “business” is a mail drop location, virtual office, or small private office that couldn’t possibly hold a business the size that is being claimed (Google Maps is very helpful for this one.)
Few (if any) employees in the operation other than the founder and/or promoter.
Background of the principals of the business is mismatched with what the business does (Use Google to find out what kinds of jobs they held previously, and compare it to what they’re supposedly doing now.)
Company’s alleged success is related to a recent announcement of some sort, rather than historical financial results (This one is even worse if the information in the announcement can’t be verified, and it appears to just be a PR stunt for the benefit of potential investors.)
Deception is the heart of money laundering. Deceiving authorities by making assets appear to have been obtained through legal means with legally-earned income or to be owned by third parties who have no relationship to the true owner.
Wilful negligence of HSBC's directors,
Failure to comply with AML laws and regulations,
Failure to change the culture at the bank,
Failure to monitor and report suspicious funds comes from high risk countries/customers
Failure to keep up with regulators, customers, employees and the general public expectations,
Failure of AML Controls,
Failure in all main elements of KYC Rules,
Other Matters: manipulation of the Libor inter-bank lending rate and
Government failure in the face of HSBC's deceptive conducts.
In short, HSBC, knowingly accepting money or funds that it is derived from a criminal offense or deliberately avoiding knowledge of the facts that the illegal source of funds or the intentions of a customer in a money laundering transaction. HSBC was a"gateway" for money laundering, terrorist financing and other illicit transactions.
Can we go a little further and advice/suggest other Local Governments and its Agencies to start ML investigations where HSBC present to do banking activities ?
