Michael invests in a scheme where returns to earlier investors are paid using funds from more recent investors. The promised returns are unrealistic and unsustainable. What type of fraudulent investment scheme is Michael involved in?Question 8Select one:1.Pump and dump2.Market manipulation3.Ponzi Schemes4.Unregistered investment advice

What is the missing word? “An example of a more complex fraud is a ______________ or pyramid investment scheme where criminals typically offer victims a very high rate of return and then either take the payment and walk away or make payments that cease within a short period. The money they do pay out in this short period usually comes from later investors. These initial repayments to earlier investors give the impression that the scheme is successful.”Group of answer choicesGet-Rich-QuickPonziNone of the available answersFraud

Sarah discovers that certain companies within her investment portfolio are not legitimate entities and were created to manipulate stock prices. What fraudulent strategy involves the creation of these fake companies?Question 7Select one:1.Dummy corporations2.Unregistered investment advice3.window dressing4.Pump and dump

Jack is a Revolut customer who recently lost his job. He plans to emigrate to another country and needs money to fund his move. He applies for a personal loan with Revolut using the payslips from his old job and lying about still being employed. Once he gets the loan funds into his account, he withdraws it in cash and disappears from his home country never making a single loan payment. This is an example of which type of fraud? Choisissez la meilleure optionInsurance fraud Identity fraud Unsecure Personal Loan Application FraudFirst party fraud

Over the past few months, he had been unable to deliver the predicted levels of returns for his clients, so he decided to resort to drastic measures. Initially he tried to recover the position by investing funds in high risk securities to generate higher returns, even though his clients had only ever agreed to medium risk levels for their investments. However, even this tactic failed to deliver sufficient profits and some investments actually lost considerable amounts of money. In desperation Krank’s behaviour took a very disturbing turn when he started a fraudulent investment operation where he paid returns to his existing investors from new capital paid into the fund by new investors, rather than from profit earned. He enticed new investors into the scheme by offering them far higher returns than were available from other comparable investments, often in the form of short-term profits which were both abnormally high and unusually consistent. Unfortunately in order to maintain this deception of seemingly perpetual high returns, Krank required an ever-increasing flow of money from new investors which was clearly unsustainable. Over time, returns became far more volatile simply because of the higher risk investments and reduced amounts of new investment capital becoming available.James Reynolds, a wealthy client who wanted to extract value from a fund managed by Krank for his impending retirement, noticed that returns on his fund were showing increased volatility. He demanded an explanation from Krank, who responded by advising him that he must have looked at his fund on a bad day. He assured Mr Reynolds he always aimed to maximize returns on his clients’ investments even if this meant bending the rules occasionally. He further claimed that Mr Reynold’s fund would both grow in value and stabilise very soon. Mr Reynolds was unconvinced by Krank’s weak and unsubstantiated explanation; so he referred the matter to Krank’s manager Required:Criticize how the behavior of Stefan Krank resulted in a clear breach in his duty to his clients as their fund manager

Choose the most appropriate answer. An investment scam __________.Will usually seem suspicious and easy to spotOften seem like a legitimate business opportunityInvolves large amounts of money from an individualUsually targets companies rather than individuals