The U.S. Federal Bureau of Investigation (FBI) has issued a warning to investors about investment scams involving platform trading and prime bank schemes.
The FBI has issued a warning about fraudulent activity that involves promises of high returns and low risk through the use of proprietary trading programs, or securities. These schemes commonly involve platform trading, prime bank, or medium-term note trading programs, it says.
The warning spells out some of the common features of these sorts of schemes and highlights red flags that are commonly associated with them, including false claims about special connections to the U.S. Federal Reserve, or other internationally renowned organizations; the need for extreme secrecy and nondisclosure agreements; and, claims that these investment opportunities are only available to a handful of special customers, and historically reserved for the wealthy, and that they are too complex for non-experts to understand.
“In general, investment programs that purport to offer an introduction to secret investment markets, which offer above-market rates of return with below-market rates of risk for privileged customers with special access, are fraudulent,” it says. “There are no secret markets in Europe or in North America in which banks trade securities. Any representations to the contrary are fraudulent.”