nd.gov - The Official Portal for North Dakota State Government
North Dakota: Legendary. Follow the trail of legends

Karen Tyler

ND Securities Department
600 East Boulevard Avenue
State Capitol, 5th Floor
Bismarck, ND 58505-0510
Phone: (701)-328-2910
Toll Free: (800)-297-5124
Fax: (701)-328-2946
Grafton Office
701 W 6th Street, #312
Grafton, ND 58237
Phone: 701-352-4592

High-Yield Investment and Ponzi Schemes

Retail investors chasing yield often find themselves falling prey to high-yield investment and Ponzi schemes promising unbelievably high rates of returns.  That trend continues and does not appear to be going away any time soon.  As with other alternative investments, high yield means higher risk and these types of alternative investments are favorites of scam artists.  Whether a typical Ponzi scheme or a high-yield investment program, many of the characteristics are the same – promise of incredibly high return coupled with low risk; a reasonably plausible explanation of why the investment is so good; a scam artist with credibility often based on claims of holding false credentials or being part of a particular group or organization.  Initial investors are paid a return and help spread the word by promoting the investment to others. Ultimately the scam will collapse leaving later investors with nothing to show for their trust in the scheme. One way to protect yourself is to ask questions and when you think you have asked all the questions you have, ask more questions.  As Bernie Madoff, the king of Ponzi schemes, once said, he only turned people away when they asked too many questions.