Crooks are using social media sites to promote illegitimate high yield investment programs (Hyips), the U.S. Financial Industry Regulatory (FINRA) warned last week.
FINRA says the bad guys behind the scams are using sites such as YouTube, Twitter and Facebook to promote the ponzi schemes, leveraging the popularity of the sites to create the impression that the investment vehicles are legit, have a strong public consensus and offer high returns.
The agency says the recently exposed “Pathway to Prosperity” scheme, which tricked more than 40,000 investors in more than 120 countries out of $70 million, used web forums and blogs to tout the returns available.
And earlier this month, the Securities and Exchange Commission froze the assts of a Canadian couple who fraudulently touted stocks through Facebook, Twitter and their own website.
FINRA has issued a guide for investors to combat the schemes, which are growing rapidly. The FBI says the number of new Hyips investigations doubled in FY 2009 over 2008.