Originally posted on USA Today Money:
State securities administrators listed four new types of fraud among their
annual list of investor threats.
•Crowd funding and Internet offers. The 2012 Jobs Act loosens some of the rules for small businesses to raise money via stock offerings. Already, NASAA has noted 1,600 to 1,700 new Internet domain names relating to crowd funding, and the regulations permitting crowd funding have yet to be written.
•Bad advice from investment advisers. Thousands of midsize investment advisory firms have shifted from federal oversight to state supervision. Many firms that haven’t been examined in a long time are being found wanting. State actions against investment adviser firms nearly doubled in 2011, NASAA says.
•Self-directed IRAs. You don’t have to invest your IRA in stocks or bonds: You can use your IRA money to invest in real estate or even a small business. But you can also open yourself up to fraud. A scam artist can create a phony business for a self-directed IRA and bleed the account dry.
•Investment-for-visa scams. Foreign investors who put at least $500,000 into a new business can get a U.S. visa under the 20-year-old Immigrant Investor Program. Scamsters will tout the potential of big foreign investors to lure U.S. investors into a fraud, NASAA says.