Reports: – March 19, 2013- A New Scam Being Perpetrated On Profitable Sunrise Investors. You may be contacted by someone claiming to work with the government offering to assist you in getting your money back. Pay a fee of $30 and the government will help.ALERT: The British Columbia Securities Commission is warning the public not to send money to Profitable Sunrise, an entity that purports to be incorporated and registered in the United Kingdom. By Robb Hicken/ BBB’s chief storyteller
When Randy Howard, of Boise, called, his voice was filled with curiosity, excitement and concern.
Seems a number of Howard’s friends were talking about investing in a company that is considered a high yield investment program.
“I just want to know if it’s a good investment,” he says. “Profitable Sunrise promises good returns, and everything I hear makes sense.”
Profitable Sunrise, based in England, claims investors in its starter plan will make 1.6% daily interest for 180 business days with a maximum investment of $499. At the end of the term, they promise a total return of 388%. Howard says it sounded abnormally high.
The BBB is rating Profitable Sunrise with an F with a warning referring to it as a ponzi scheme.
BBB says before making any decisions on investing any money, make sure the company is properly licensed with the State Securities Administrator and is not the subject of government actions for the way it conducts its business.
On March 6, the Alabama Securities Commission issued an investor alert to all Alabama residents about possible securities fraud linked to the attempted sale of unregistered investment contracts being offered by “Profitable Sunrise.”
Cited in the warning was Roman Novak, Radoslav Novak, and Inter Reef LTD d/b/a Profitable Sunrise were ordered to cease and desist from offering for sale, soliciting offers to buy or selling securities until they have been registered as dealers or salesmen of securities.
On February 27, 2013, North Carolina securities issued a temporary order to cease and desist to Roman Novak, Radoslav Novak, and Inter Reef LTD d/b/a Profitable Sunrise.
Anyone who bought these securities are asked to North Carolina division at 1-800-688-4507; or in Alabama at 1-800-222-1253.
Idaho’s Department of Finance has not investigated this company. Anyone in Idaho who has concerns is advised to call 1-208-332-8000;
BBB urges caution when investing in programs that claim to be a HYIP. High-yield investment programs are unregistered investments created and touted by unlicensed sellers.
- High, unsustainable yields. Investment return is usually stated as a daily rate of return, often with cryptic “short-term” and “long-term” payout options. For example, the Genius Fund HYIP at one time promised 36 to 40 percent daily, with 2-day yields of 106 percent. In contrast, the Pathway to Prosperity scheme offered investors a choice of 7-, 15-, 30- and 60-day “plans” paying annual rates of return as high as 17,000 percent! Regardless of how the yield is presented, keep in mind that returns on investments in large-company stocks have historically averaged less than 10 percent per year.
- Unclear methodology for achieving returns. HYIP sites often give almost no clues to how the promised returns will be generated beyond generic references to trading in foreign currencies, futures or other investments.
- Lack of concrete information about the HYIP operator. HYIP operators cloak themselves in secrecy about who manages investor money, where the company is located or where to go to get more information.
- Offshore operations. Many HYIP sites are located outside the U.S. and typically are not licensed to sell securities in any country, let alone here. Be aware that generally persons or firms offering securities to U.S. residents must be licensed by FINRA and registered with the SEC.
- Reliance on e-currency sites. Virtually all HYIP sites need you to open an “e-currency” account from one of a number of online vendors that service the HYIP market. Be aware that while there is no federal regulation of e-currency sites, many states need “money transmitters” to register with the state’s banking regulator. An unlicensed e-currency site is a red flag.
- Incentives to recruit new investors. Many HYIP ploys dangle the prospect of paying a “referral bonus”—as high as 25 percent—to those who bring in new investors with fresh streams of money. Remember that Ponzi schemes tend to collapse when the fraudster at the hub can no longer attract new investors, so perhaps it’s no surprise that HYIPs encourage participants to rope in new recruits to help keep the scheme afloat.