Were You Part of an Oil Investment Scam?
There are many different types of security scam that particularly target the elderly.
One of these is oil investment scams, which promise investors high returns on their purchases of oil and natural gas shares.
Although it certainly is possible to make legitimate investments in these industries, it is easy for disreputable parties to exaggerate the returns on an opportunity.
They can even offer completely false opportunities for investors who have not done their research.
The best way to avoid falling victim to this type of scam is to thoroughly research all investment opportunities presented to you. This can help to separate the legitimate offers from the scams.
Below are a few key points to help you understand oil investment scams and how to avoid them better.
Remember, if an offer seems too good to be true, it most likely is.
If you are not sure about the legitimacy of an investment offer, discuss it with a trusted financial advisor.
Oil Investment Scam Topics Covered Here
What is a Boiler Room?
During your research about oil investment scams, the term “boiler room” will likely come up.
This simply refers to a bank of callers who contact potential buyers about a particular operation.
These callers use high-pressure tactics to systematically call investor after investor, sometimes making use of robocalls to speed up the process.
Red Flags that should Send you Running from an Oil Investment “Opportunity”
Always approach investment opportunities with skepticism. Use the salesperson’s claims as a starting point for your research. Then only purchase a security if your research determines that it would be a worthwhile investment for you.
Your financial advisor can help you make this determination.
There are many red flags to watch out for in conversations with securities salespeople. A few examples of these include:
- The pressure to make a purchase immediately. Be wary of “limited opportunities” and prices that are dependent on making a purchase within a specified time frame. Salespeople who pressure investors to act quickly are attempting to capitalize on the investor’s emotions and the lack of an opportunity to do his or her own research;
- Unsolicited offers. Think about it – if an investment opportunity is truly valuable, salespeople would not need to market it in order to sell it to investors. If you receive letters, phone calls, or emails about oil and natural gas investment opportunities, simply ignore them;
- Guaranteed high returns. There is no way to guarantee an investment’s returns. If you are offered an investment opportunity with guaranteed returns with no risks, you are being offered a scam; and
- Secrecy around the opportunity. If a salesperson tells you not to discuss an investment opportunity with your loved ones, your financial advisor, or your attorney, run away fast. The salesperson is not telling you to keep the opportunity a secret because it will make you rich. He or she is telling you that because it is a scam and the party with whom you discuss it will tell you so.
How Can I Protect Myself and my Loved One from Oil Investment Scams?
Always do your research. When a broker offers you an investment opportunity, do the following:
- do your research about the opportunity,
- research the broker and,
- research the company with which he or she works.
You can do this by looking at individual brokers and their professional histories up in online databases like the BrokerCheck, which is operated by the Financial Industry Regulatory Authority (FINRA).
Do not allow finances and investments to be taboo discussion topics in your home and with your loved ones. By discussing these issues regularly, you can note any potential issues that arise and offer your advice to your loved ones. In return, your loved ones may be able to help you avoid scams and make smart investment decisions.
Ask a salesperson questions about the investment opportunity and check his or her answers against the information provided by state oil and gas regulatory agencies. Some oil investment scams involve the overhyping or twisting of published information about the market. Get the straight facts right from the source to separate the truth from the sales pitches.
With oil and gas investments, ask specific questions about the well itself. Ask for the contact information for the well’s operator and ask about the pipelines that will be used to transport the raw material, how the lease and taxes for the site will be paid, and the plan for completing or abandoning the well when it is no longer profitable.
If a salesperson is not willing to give many details about the well itself or if the details do not seem logical, you could be discussing a scam.
What Can I Do if I am a Victim of an Oil Investment Scam?
If you are a victim of an oil investment scam, report your case to your state’s securities regulatory agency as soon as possible. Local law enforcement, your state securities regulatory board, and the Securities Exchange Commission may need to get involved in your case to investigate it and prosecute the alleged offender.
Hire an experienced securities fraud lawyer to represent your case and protect your rights. You have the right to seek compensation for the money you lost to a fraudulent investment opportunity.
It can be natural to feel embarrassed or ashamed about being a fraud victim. Do not allow these feelings to keep you from pursuing a securities fraud claim.
Work with an Experienced Florida Securities Fraud Attorney
Our team at Sonn Law Group is dedicated to protecting our clients’ rights and interests. If you or a loved one have fallen victim to an oil investment scam or if you simply would like to learn more about securities fraud, your rights, and your options if you do become a victim, contact our firm to set up your initial consultation with an experienced securities fraud attorney at our firm.
Our office is located in Florida. We also proudly serve clients from all over the United States, Mexico, and South America. Do not wait to make the call.