Avoiding Investment Frauds: Knowing the Diversities Between Pyramid and MLM

July 19, 2012 · Posted in Education · Comment 

In the world of business, getting left behind could be a pitfall for any businessman. As more and more entrepreneurs would like to rise and earn earnings, different promoting techniques have appeared. One of the most well-liked marketing and sales strategies is Multilevel Selling (MLM). An easy business model that began in the 90s, MULTI-LEVEL MARKETING has become one of the most generally used techniques in income-generating affairs. Although frequently confused with the pyramid and Ponzi schemes , Mlm really allows the members to sell products and earn royalties. Mentioned below are some facts that distinguish M.L.M from investment frauds like the pyramid and Ponzi schemes.

MULTI LEVEL MARKETING firms follow a defined structure when inducting members. Those that were able to invite an individual into Multi Level Marketing are called sponsors. The new sign ups are then called distributors. Unlike in pyramid cons, the new distributors only need to pay a sign up fee or acquire products that correspond to the amount just once. Both parties, the sponsor and distributor, also have to sign an agreement prior to the membership. Once someone becomes a distributor, he can then invite other people to join the system and become sponsors.

Another difference between pyramid stings and MLM is the process of gaining earnings. In pyramid swindles, the recruiter will ask the new member for a large initial fee and guarantee it'll be doubled after some time. In Mlm, the upfront charge isn't too high and may also be converted to goods supplied by the company. The distributor can sell the goods and add a commission on the products to get his cash back.

What's even better is that distributors can earn revenue passively with MLM business ventures. For example, a sponsor with a line of distributors can gain commission from those below him. This structure is called the downline structure. It basically means those at the very top of the hierarchy-those who've been members for a long time-are likelier to gain higher earnings.

Aside from these, distributors are also more likely to improve their promoting talents compared to pyramid members. MLM business opportunities, seminars, and trainings are provided to the distributors to enhance their sales promotion talents. Apart from that, distributors and sponsors work together, and the sponsors guide the new sign ups in the business. These business opportunities and trainings aren't present in the pyramid and Ponzi swindles.

Pyramid and Ponzi schemes have heavy rates of collapse, leaving its members in disarray. To prevent being involved in these situations, folk should check the trustworthiness of the recruiter. For instance, a person should check the success rate of the various MULTI-LEVEL MARKETING business opportunities they have an interest in prior to making a commitment to one.

The article above is all about investment fraud lawyer and finra lawyers . The author is Alec Madas.

Ex-Sentinel execs indicted in $500M fraud

June 23, 2012 · Posted in Education · Comment 

Federal law enforcement officers on Fri. indicted Eric Bloom and Charles Mosely, chief executive and head trader of broke Sentinel Management Group, on charges of scamming more than 70 clients of more than $500 million. Officials need a securities fraud lawyer to clear up that specific fraud.

The case, brought by outgoing U.S. Lawyer Patrick Fitzgerald and one of the largest criminal financial crime cases ever prosecuted in Fed court in Chicago, derives from the August 2007 collapse of Sentinel, which was in suburban Northbrook and managed short term cash investments for a spread of financial institutions and other clients, Fed. officers.

The indictment announces that Bloom and Mosely reportedly misappropriated instruments belonging to consumers by utilizing them as security for a loan that Sentinel acquired from Bank of Long Island Mellon Corp. That loan purportedly was employed to get millions of greenbacks worth of high-risk, illiquid stocks for a trading portfolio maintained for the sake of Sentinel’s officials, including Mosley, Bloom, certain Bloom family members and corporations controlled by the Bloom family, the indictment claimed.

The indictment recounted Bloom, the president and Manager of Sentinel, was answerable for its everyday operations yet purportedly misled clients four days before Sentinel declared bankruptcy by blaming Sentinel’s fiscal Problems on the “liquidity crisis” and “investor fear and panic.”

Officers claim he knew that the reasons for Sentinel’s financial Problems were its purchase of high-risk, illiquid instruments, disproportionate use of leverage and the resulting indebtedness on the BoNY credit line, which exceeded $415 million on Aug. 13, 2007. Sentinel filed for bankruptcy on August. 17, 2007.

Bloom, 47, of Northbrook, and Mosley, 48, of Vernon Hills, will be implicated on a date to be prepared in U.S. District Court in Chicago. They were each charged with 18 counts of wire fraud, one count of stocks fraud and one count of making fake statements to an employee allowance plan in a 20-count indictment that was returned by a Fed. grand jury yesterday. The indictment looks for forfeiture of more than $500 million.

The article above is all about investment fraud and ponzi schemes . The writer is Jesus Delicana.

Victims of Qwest stocks crime get $44 million

June 18, 2012 · Posted in Education · Comment 

The U.S. Justice Dep. announced today that it has returned roughly $44 million to victims of the stocks fraud scheme that rocked Qwest Communications World and led straight to the conviction of its previous Chief Executive Joseph P. Nacchio.

The $44 million in funds were forfeited due to Nacchio’s 2007 Fed conviction for securities fraud lawyer .

The return of the cash was announced by John F. Walsh, U.S. Attorney for Colorado; Denver FBI agent in control James F. Yacone, and Helper Lawyer General Lanny A. Breuer of the Justice Dept's Criminal Division.

Between 1999 and 2002, Nacchio in public said unrealistic revenue projections for Qwest and then caused Qwest to distibute false and deceiving statements to the general public about the company’s financial condition, claimed the Justice Office.

After the irregularities were uncovered Qwest stock, which had traded as high as $60 per share, plummeted to about $1 per share.

Following his conviction, Nacchio was given 70 months in prison and was ordered to forfeit $44 million in funds, the net proceeds from the crime scheme, said prosecutors. Nacchio was also ordered to pay a $19 million fine that went into a fund for crime victims.

“I am pleased that we were able to recover more than $44 million in criminal proceeds and bring it back to trusting Qwest investors,” claimed Walsh.

Yacone, the FBI special agent in control in Denver, said that a priority of the FBI isn't just defending monetary markets, but seizing “ill-gotten gains.

“We are optimistic the cash being returned will remedy some of the damage due to Nacchio,” said Yacone.

Assistant Lawyer General Breuer announced the return of the cash is satisfying a central aim of the Criminal Division’s Victim Asset Recovery Programme by returning those funds to Nacchio’s victims.

The criminal case against Nacchio was prosecuted by the U.S. Attorney’s Office in Denver and the Justice Dept's criminal division.

The case was analyzed by the FBI.

The distribution of funds to victims was overseen and sanctioned by the Dept of Justice’s Victim Asset Recovery Programme.

Read more: Victims of Qwest securities fraud get $44 million – The Denver Post http://www.denverpost.com/breakingnews/ci_20541908/victims-qwest-securities-fraud-get-44-millionixzz1xu24eSwbRead The Denver Post’s Terms of Use of its content: http://www.denverpost.com/termsofuse.

The tract above is all about investment fraud and ponzi schemes . The writer is Alexander Xavier.