ars, raising over $500 million. Most of these notes had high yields, ten to twelve percent, compared to similar investments with low risk. Also most were bonded as to the repayment of principal and interest. Tens of thousands of investors found this was their opportunity to have what they wanted; high yield and low risk. They were wrong and most lost all of High yield and low risk are two attributes of an investment that investors want. Time-tested investment wisdom has told us the higher the risk, the higher the yield and the lower the risk, the lower the yield. Are they really available? Yes, but watch out.

Some traditional investments with high yield are: hedge funds, small-cap stocks, junk bonds, commodities, emerging markets and a variety of others. Although the yields have been outstanding in each of these at times, the risk has proved to be great. Some traditional investments with low risk are: certificates of deposit, money market mutual funds, US government securities, annuities, and many more. Some of these are insured or backed by the government and others are safe due to the strength of the securities issuer.

Fraudsters have lured investors with promises of high yield and low risk, because that is what many investors want. This is most prevalent in times of low yield, such as the last ten years, when rates of five year certificates of deposit bottomed into the low single-digit range. Investors, particularly those who need low risk the most, saw a promise to higher yields with safety. So with rising yields on other investments, will these frauds disappear? No the fraudsters will simply adjust their rates higher to attract investors.

Over fifty companies offered unregistered, short-term promissory notes to the investing public during the past ten years, raising over $500 million. Most of these notes had high yields, ten to twelve percent, compared to similar investments with low risk. Also most were bonded as to the repayment of principal and interest. Tens of thousands of investors found this was their opportunity to have what they wanted; high yield and low risk. They were wrong and most lost all of t

ities, emerging markets and a variety of others. Although the yields have been outstanding in each of these at times, the risk has proved to be great. Some traditional investments with low risk are: certificates of deposit, money market mutual funds, US government securities, annuities, and many more. Some of these are insured or backed by the government and others are safe due to the strength of the securities issuer.

Fraudsters have lured investors with promises of high yield and low risk, because that is what many investors want. This is most prevalent in times of low yield, such as the last ten years, when rates of five year certificates of deposit bottomed into the low single-digit range. Investors, particularly those who need low risk the most, saw a promise to higher yields with safety. So with rising yields on other investments, will these frauds disappear? No the fraudsters will simply adjust their rates higher to attract investors.

Over fifty companies offered unregistered, short-term promissory notes to the investing public during the past ten years, raising over $500 million. Most of these notes had high yields, ten to twelve percent, compared to similar investments with low risk. Also most were bonded as to the repayment of principal and interest. Tens of thousands of investors found this was their opportunity to have what they wanted; high yield and low risk. They were wrong and most lost all of

others are safe due to the strength of the securities issuer.

Fraudsters have lured investors with promises of high yield and low risk, because that is what many investors want. This is most prevalent in times of low yield, such as the last ten years, when rates of five year certificates of deposit bottomed into the low single-digit range. Investors, particularly those who need low risk the most, saw a promise to higher yields with safety. So with rising yields on other investments, will these frauds disappear? No the fraudsters will simply adjust their rates higher to attract investors.

Over fifty companies offered unregistered, short-term promissory notes to the investing public during the past ten years, raising over $500 million. Most of these notes had high yields, ten to twelve percent, compared to similar investments with low risk. Also most were bonded as to the repayment of principal and interest. Tens of thousands of investors found this was their opportunity to have what they wanted; high yield and low risk. They were wrong and most lost all of

ticularly those who need low risk the most, saw a promise to higher yields with safety. So with rising yields on other investments, will these frauds disappear? No the fraudsters will simply adjust their rates higher to attract investors.

Over fifty companies offered unregistered, short-term promissory notes to the investing public during the past ten years, raising over $500 million. Most of these notes had high yields, ten to twelve percent, compared to similar investments with low risk. Also most were bonded as to the repayment of principal and interest. Tens of thousands of investors found this was their opportunity to have what they wanted; high yield and low risk. They were wrong and most lost all of

ars, raising over $500 million. Most of these notes had high yields, ten to twelve percent, compared to similar investments with low risk. Also most were bonded as to the repayment of principal and interest. Tens of thousands of investors found this was their opportunity to have what they wanted; high yield and low risk. They were wrong and most lost all of their investment.

These companies were start-up companies with no proven income stream. All had a great idea, such as satellite radios, software for the Palm Pilot, a television station, oil and gas exploration, hotel development and many more. Most were bonded, which made the higher risk start-ups a low risk investment. The note issuers paid premiums to bonding companies and each investor received a bond for their investment. All seemed well, until the issuer failed and the bonding company did not pay. It turned out the bonding companies were also fraudulent.

Each of the bonding companies was based outside the US in countries which regulated only insurance companies doing business within their country. The companies had small offices and enough personnel to answer the phone and process paperwork. However, these companies simply denied payment of claims or went out of business to avoid the payment of the claims. These fake bonding companies were started by unrelated fraudsters and charged premiums of about eight percent of the note principal. The fraudsters running these companies pocketed the premiums after paying the small cost of operating their fake companies.

The lessons learned from these note frauds are to believe time-tested investment wisdom. Don’t invest based on the fraudster’s pitch. Do your due diligence before investing. Know who you are dealing with. If the note investors had checked out