Last week, we learned about the dangers of pump and dump schemes and this week we’re covering a closely-related topic, pump and dump enabler schemes.
Pump and dump enabler schemes can appear to be a valid opportunity, so if you aren’t careful, you could unknowingly become involved. The scheme starts with someone asking to use your name in a “business deal” as a shareholder, director or official for a public company. You will be told that all you have to do is provide some personal information and sign some documents. Sounds easy, right? To make the deal even sweeter, you may even be offered money for your involvement.
What you don’t know is that that this person is trying to set up a fraudulent company, and is looking for an individual with a clean name and record to get this company past the regulators. What you also don’t know is that once you’ve signed your name over, it will be linked to this company forever – for better, but more likely, for worse.
Watch the video to learn more about this type of scheme.
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Investment fraud fact sheet
Red flags of investing fraud