Whether it is through the internet or in the real world, investment scams are a fact of life. Here is a list of the top ten investment scams compiled by the California Department of Corporations:

1. Promissory notes The illegal and fraudulent sale of promissory notes and unlicensed broker-dealer activity by the sales agents marketing them. Some legitimate brokers are selling these promissory notes unaware or misunderstanding what they are selling.
2. Internet fraud Through the use of internet, scamsters are plying their trade by making illegal and fraudulent investment offerings, engaging in market manipulation, conducting insider trading and acting as unlicensed broker-dealers.
3. Telemarketing fraud Boiler room operations are not new. High pressured telephone sale tactics are being used to part innocent investors from their money by encouraging investors to invest into worthless investments.
4. Investment seminars and financial planner activity Many investment seminars and financial planner activity are carried on without the required licenses. The organizers of these seminars fail to disclose conflicts of interest and hidden fees and commissions. Many investment seminars are not sincerely aimed at aiding investors on how to invest but are trying to sell certain financial products in which the organizer has an interest.
5. Affinity group fraud Affinity group fraud is the fraud against religious, ethnic and professional groups by members of these groups or persons claiming to provide assistance to these groups. Members of these groups are lulled into a false sense of security believing they can trust a group member who is merely a wolf in sheep’s clothing trying to encourage the purchase of a worthless investment.
6. Abusive sales practices by licensed broker-dealers and agents These practices include sales of securities to unsuitable investors, failure to disclose critical information, fraudulent offerings of securities and market manipulation of low-priced microcap offerings.