SEC files court order against Ponzi scheme | finder.com

SEC files court order against Ponzi scheme

Peter Terlato 7 November 2017

SEC warns investors against falling victim to advertising packs and paid-to-click scams.

The Securities and Exchange Commission (SEC) has issued a caution to potential investors seeking an “easy payday” by purchasing or signing up for paid-to-click memberships and advertising product packs.

The SEC posted an investor alert this week warning that these online advertising programs, which also target those seeking to advertise, may have little to no revenue potential and could be a type of Ponzi scheme.

“Online paid-to-click (PTC) programs often promise investors a share of the program’s profits in exchange for paying an upfront fee or buying products,” the SEC said in its investor alert.

“For example, a PTC program may claim you can share in its profits if you buy ‘ad packs’ or other advertising products. These PTC programs might promise you advertising services such as displaying your ads on their network or guaranteeing traffic to your website if you become a member or buy their ad packs.”

Last week the SEC filed an enforcement case in federal court, alleging that around 99% of one perpetrator’s “profits”, paid to early investors, was sourced directly from buy-in fees collected from newer investors.

The alleged perpetrator, Miami-based Pedro Fort Berbel and his company Fort Marketing Group, reportedly siphoned millions of dollars from investor funds to purchase a luxury home, automobiles, and private plane charters and used the money to fund other businesses, according to the SEC’s court complaint.

The SEC alleges that Berbel and Fort Marketing Group raised more than $38 million from at least 150,000 investors by soliciting online posts and videos claiming investors could share in the companies’ profits.

The SEC’s complaint charges Berbel and Fort Marketing Group with violations of the Securities Act and the Securities Exchange Act. The perpetrator was also charged with selling investments that are not registered with the SEC’s investor.gov website, as required under federal securities laws.

The SEC obtained a court-ordered asset freeze against Berbel and his companies.

“Be skeptical if you are offered high returns for buying advertising products or clicking on online ads,” SEC spokesperson for the director of the office of investor education and advocacy Lori Schock said.

“Some paid-to-click programs are actually Ponzi schemes.”

The SEC often has help in stopping scams. The commission recently awarded one whistleblower more than $1 million for providing information about a violation by a registered company that impacted retail customers.

As Black Friday approaches, beware of an increasing number of scams. Follow these tips to protect yourself.

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