{"id":659,"date":"2010-03-08T23:09:19","date_gmt":"2010-03-08T23:09:19","guid":{"rendered":"https:\/\/www.stockbrokerfraudblog.com\/2010\/03\/securities_fraud_law_firm_shep_2"},"modified":"2022-03-09T15:59:56","modified_gmt":"2022-03-09T21:59:56","slug":"securities-fraud-law-firm-shep-2","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/securities-fraud-law-firm-shep-2\/","title":{"rendered":"Securities Fraud Law Firm Shepherd Smith Edwards & Kantas LTD LLP Warns Investors Against Affinity Fraud"},"content":{"rendered":"

\t\t\t\tAffinity fraud <\/a>involves investment schemes that target specific groups, such as the elderly, those belonging to identifiable ethnic or religious communities or members of professional groups. Fraudsters seek to gain the trust of members of the group by either belonging to the group or pretending they belong. One tactic is to seek to fool group leaders into thinking the investments are legitimate so that they will assist in promoting the fraud. This is often accomplished by generating false profits for formal or informal leaders of the group at the beginning. <\/p>\n

Pyramid schemes and ponzi scams<\/a> are often employed to commit affinity fraud. In these schemes funds from new investors are used to falsify profits to current investors. This lulls them into believing their investments are turning a profit. as new investors are deceived into believing their investments will also soon grow in value. Inevitably, when there are no more new investors to sign up, the scheme falls apart and investors usually later learn the fraudster has stolen their funds.<\/p>\n

However, affinity fraud can often involve abusing trust to lure victims into simply investing into high-risk and\/or high-commission investments to generate commissions and fees, or buying and selling (“churning”) invesements to gain multiple comissions. <\/p>\n

Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

Affinity fraud involves investment schemes that target specific groups, such as the elderly, those belonging to identifiable ethnic or religious communities or members of professional groups. Fraudsters seek to gain the trust of members of the group by either belonging to the group or pretending they belong. 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