FraudCaster

Archive for the ‘Fraud Thinking Errors’ Category

Cognitive laziness is simply “lazy thinking”. A disease to which many Americans suffer.

So, what is lazy thinking? And, how does it apply to being victimized by fraud? Read the rest of this entry »

On November 24, 2009, six individuals were sentenced in federal court in Detroit for their roles in a wide-ranging international stock fraud scheme involving the illegal use of bulk commercial e-mails, or “spamming.” Read the rest of this entry »

In last weeks article, we laid the foundation for understanding the Pump n’ Dump. This week we finish my story about my investing in LOCH and the thinking errors that led to my financial losses…

The unscrupulous fraudsters found a real company that had a real story which really ended in failure. But, the fraudsters spun a winning story around the real one that made it sound like LOCH was successful and about to sign a major military contract – which of course would cause the company value to increase and therefore its stock to follow suit.

The FBI call this “kernels of truth, stuffed with a lie”. It was easy to check out the company and see the press releases showing what was true. But, it was impossible to verify the “leaked” information about the contract. On the strength of the fictitious contract, investors (like me – and, investor is a strong word) bought the stocks. Read the rest of this entry »

In the stock world, if it sounds too good to be true, it is probably a Pump n’ Dump! What is that?

A Pump n’ Dump is a scheme where unscrupulous people, like the six that were recently sentenced to up to 51 months in federal prison, buy stock in struggling or sometimes defunct companies that are still available on the stock market, pump up their value through false or misleading statements, then dump their own stocks at the highest possible value leaving the rest of the investors holding worthless stock. Read the rest of this entry »

Our belief system has a direct influence on how we process investment opportunities. As a Christian, I bought into a belief system, a worldview, where God wants us rich. I actually believed that if you are a Christian, then God automatically wants you to be rich; like it is a benefit of membership. I’m embarrassed to admit it.
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Do you ever play the lottery? Have you ever thought to yourself, “someone is going to win, why not me?” Maybe it’s time for your “ship to come in?” This kind of thinking is prevalent in American thought. Maybe most of us have had a daydream on occasion about winning millions in the lottery. We could turn a five dollar investment into a $200 million windfall. I mean, it’s going to happen this week to someone, isn’t it”?
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Consumer fraud has increased exponentially over the years. Technology has made it easier than ever to create the appearance of a legitimate investment opportunity. As consumers, we need to be aware of the different angles that fraudsters use to bilk innocent victims out of their money…
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After having been a victim of a massive fraud, I discovered some things about myself. One of the lessons was that I had a misperception that aided in my own self-deception. I believed that the elite upper class – I’ll call them the “rich” – somehow knew all the secrets of making massive amounts of money. They were privy to investment opportunities only available to those with billions of dollars at their disposal…
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