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Home » Type of scams » Share & Bond Scams

Share & Bond Scams

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Table Of Contents

Table Of Contents

Understanding Shares and Bonds

Shares and bonds are popular investment vehicles that allow individuals to invest in companies or governments. Shares, also known as stocks, represent ownership in a company, while bonds are debt securities issued by companies or governments.

As these investments are widely traded and sought after, they can also attract scammers looking to exploit unsuspecting investors.

Common Types of Share and Bond Scams

Boiler Room Scams

Boiler room scams involve high-pressure sales tactics used by unscrupulous brokers or salespeople to sell overvalued, illiquid, or even non-existent shares and bonds. These scammers often operate from temporary offices or “boiler rooms” and target inexperienced investors with unsolicited offers and misleading information.

Pump and Dump Schemes

Pump and dump schemes involve the artificial inflation of a stock’s price through the spread of false or misleading information. Once the stock price has been inflated, the scammers sell their shares, causing the price to drop and leaving investors with significant losses.

Advance Fee Fraud

In advance fee fraud, scammers convince investors to pay an upfront fee to participate in a lucrative investment opportunity, such as purchasing shares or bonds at a discounted price. Once the fee is paid, the scammers disappear, and the investment never materializes.

Ponzi Schemes

As mentioned in a previous article, Ponzi schemes involve using funds from new investors to pay returns to earlier investors, creating the illusion of a profitable business. These schemes often involve shares or bonds and ultimately collapse when there are not enough new investors to continue funding returns.

Red Flags for Share and Bond Scams

Unsolicited Contact

Be cautious of unsolicited phone calls, emails, or messages promoting investment opportunities in shares or bonds. Scammers often use these methods to target potential victims.

High-Pressure Sales Tactics

Scammers may use high-pressure sales tactics to convince investors to make quick decisions without conducting proper due diligence. Be wary of anyone pushing you to invest immediately or making it difficult for you to say no.

Guaranteed Returns or Low Risk

No investment is without risk, and guaranteed returns are a red flag. Be skeptical of investment opportunities that promise high returns with little to no risk.

Lack of Transparency

Scammers often provide vague or misleading information about the investment, the company, or the individuals involved. Be cautious of opportunities that lack transparency or clear documentation.

Unlicensed or Unregistered Offerings

Investment opportunities that are not registered with the appropriate regulatory authorities or offered by unlicensed individuals should be approached with caution. Always verify registration and licensing before investing.

Protecting Yourself from Share and Bond Scams

Do Your Research

Before investing in any opportunity, conduct thorough research to understand the investment, the company, and the people behind it. Look for information about the company’s financials, management team, and business model.

Verify Registration and Licensing

Check with the appropriate regulatory authorities to ensure that the investment opportunity is registered and the individuals offering the investment are licensed.

In the United States, you can use the SEC’s Investment Adviser Public Disclosure (IAPD) database and the Financial Industry Regulatory Authority (FINRA) BrokerCheck system.

Diversify Your Investments

One of the best ways to protect yourself from investment scams and reduce risk is to diversify your investment portfolio. By spreading your investments across different asset classes and industries, you can minimize the potential impact of a single investment loss.

Be Wary of Unsolicited Offers

Unsolicited offers can be a red flag for potential scams. Exercise caution when receiving unsolicited investment opportunities, and always verify the legitimacy of the offer before considering it.


Share and bond scams continue to be a significant concern for investors. By understanding the common types of scams, recognizing the red flags, and taking steps to protect yourself, you can minimize the risk of falling victim to these fraudulent investment schemes.

Always conduct thorough research, verify registration and licensing, diversify your investments, and be cautious of unsolicited offers to safeguard your financial well-being.


What is the difference between shares and bonds?

Shares, also known as stocks, represent ownership in a company, while bonds are debt securities issued by companies or governments. Investing in shares offers potential capital gains and dividends, while bonds provide regular interest payments.

How can I report a suspected share or bond scam?

If you suspect an investment opportunity is a share or bond scam, report it to the appropriate regulatory authorities. In the United States, you can file a complaint with the SEC, the CFTC, or your state securities regulator.

Can I recover my money if I’ve been scammed in a share or bond scam?

Recovering money invested in a share or bond scam can be challenging. In some cases, authorities may recover funds and distribute them to victims, but the process can be lengthy and may not result in the full recovery of your investment.

What should I do if I receive an unsolicited investment offer?

If you receive an unsolicited investment offer, exercise caution and verify the legitimacy of the offer before considering it.

Check the registration and licensing of the investment and the individuals offering it with the appropriate regulatory authorities.

How can I protect myself from share and bond scams?

To protect yourself from share and bond scams, conduct thorough research on investment opportunities, verify registration and licensing, diversify your investments, and be cautious of unsolicited offers.

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