By D. Russell Stroud, Student Intern Fall 2013
College Football Hall of Fame inductee and former UGA Head Coach, Jim Donnan, has been charged with investor fraud in conjunction with an alleged $80 million Ponzi scheme conducted between August 2007 and October 2010. Donnan and his partner, Gregory Crabtree, are said to have convinced nearly 100 investors, the majority of which were players, coaches, and other contacts from Donnan’s prior coaching and commentating roles, to invest in their scheme.
A Ponzi scheme is a classic scam in which a “central fraudster” induces his targets to invest in a seemingly legitimate venture. However, rather than utilizing the new influx of capital in the manner assured to the victims, the money is used to pay returns to earlier-stage investors. The scam usually continues until the fraudster can no longer recruit new financiers, leaving his unknowing prey with little more than empty pockets. Continue reading
After filling up on turkey and all the fixings today, are you beginning to plan your shopping trips for Black Friday or web buys for Cyber Monday?
As you plan, you might also want to consider shopping for something more important than this year’s hottest gift. Why not do some shopping for your own financial future?
When it comes to finances, many don’t take the time to shop and compare. And that could be a costly mistake. Add yourself to this year’s shopping binge. Gift yourself by learning more about shopping for financial projects or saving or smart investing.
If your sport is football rather than shopping, be sure to check out our blog tomorrow to learn how your team loyalty might put you at risk for investment fraud.
The Investor Advocacy Clinic is thankful for our dedicated student interns who are committed to helping investors. What are you thankful for this year?
By James Gallagher, Fall 2013 Student Intern
I pay for my food, coffee, and almost everything else I buy electronically. I hand over a plastic card, the nice man or woman at the counter swipes my piece of plastic on a machine, I receive my goods, and magically money is taken out of my bank account. If I got in my time machine (which I also paid for by credit card), went back to 1920 and described this type of transaction I would probably be locked in an insane asylum.
Now, I get online, log into my virtual wallet and make a donation to the Electronic Frontier Foundation. I donate 25 Bitcoins. Reread my last sentence again. There should be at least two questions that pop into your head immediately. The first is what is a Bitcoin and the second is how much is a Bitcoin worth? Continue reading
By Cassandra Bradford, Fall 2013 Student Intern
Would you invest in a company that sells house slippers with night lights if 50 Cent said you should?
During 2010 and 2011 many people did just that after Curtis James Jackson III, former drug-dealer and amateur boxer turned rap artist, now known to the world as 50 Cent, tweeted several messages about a company in which he was the majority shareholder. 50 Cent owned 30 million shares of penny stock in a company known as H&H Imports (HNHI). In 2010 he tweeted about the stock and encouraged people to buy it, raising the stock price from about 10 cents per share to 39 cents per share at one point. 50 Cent’s stock value increased approximately 8.7 million dollars. The company had few sales and was operating at a loss, yet investors bought it, anticipating huge gains, based on twitter messages from a rap artist.
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Although 50 Cent’s penny stock tweets are ironic and gives a good laugh, it is part of a much larger scheme causing many investors to lose money. 50 Cent may have a song called “Get Rich or Die Tryin,” but that hardly makes him qualified to give investment advice, a point which should be taken seriously. Continue reading
Have you checked out the new BrokerCheck? The investor-friendly tool has been updated to be even more user friendly. Now you can run BrokerCheck directly from FINRA’s home page. And, a new graphical timeline output makes it easier to read and interpret the results.
Take a few minutes to check out the new and improved BrokerCheck and, most importantly, be an informed investor by knowing as much as possible about your investment professional and/or firm. For more information about BrokerCheck, see the helpful FAQs here.
By Cassandra Bradford, Fall 2013 Intern
Most of us are aware that there is still an income gap between men and women, but what you might find surprising is that according to several studies, women tend to invest less than men and are less confident in their investment abilities. According to one source, less than one in five women had an investment portfolio as opposed to the over one in four men who have an investment portfolio. The statistics about men and women and their investments spark several questions. Why do women invest less than men? What are the consequences of this trend? What steps can and should be taken to change this trend in the future? Continue reading