An Inside Look at a Billion-Dollar Scam

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View This Message on the Web October 20 Anatomy of a Scam: This "Prime Bank Program" Has Already Cost Investors Billions By Shah Gilani Contributing Editor Money Morning Two years ago, an associate of mine lost $100,000 because he didn't listen to me. A year ago, I saved a manufacturing company from the same scam. And just last week I saved a friend of mine $300,000. For several years now, a far-fetched but seemingly plausible investment opportunity has been wreaking havoc across the globe. In the United States alone, an estimated $10 billion has been lost in this particular gambit. The scheme is typically hidden behind such legitimate-sounding names as "Prime Bank Trading Programs," "High-Yield Investment Programs," or "Roll Programs." These are not legitimate investment opportunities. The reality is, they are outright scams. And my role as a professional investor has provided me with an up-close-and-personal vantage point from which to observe some of these con games. Everything I am relating in this story is true. This story – along with real names, contact information and associated documents – has been forwarded to the Federal Bureau of Investigation and the U.S. Securities and Exchange Commission in an effort to catch these brazen conmen and to save unsuspecting investors from further losses. Read Full Article » 2,799,900% Gains Starting in November? Imagine an oil company so small, not a single Wall Street firm covered it. So small, it would have to grow 5,000 times its current size to equal one Exxon. Now imagine this same tiny company discovering 40 billion barrels of oil. Such a haul would be worth $2.8 trillion dollars. And it would be enough to drive the firm's market cap up 2,799,900%. Well, you don't have to imagine. Because it's happening right now. One tiny Texas firm is about to bring its trillion-dollar discovery to market. And this historic event could make you very, very rich. For details, please go here now. Sponsored content Will High Unemployment Strangle the Recovery? By Don Miller Associate Editor Money Morning The worst recession since the Great Depression has already eliminated 7.2 million jobs, and analysts figure 750,000 more jobs could disappear over the next six months. That means the administration of U.S. President Barack Obama may be forced to employ a second stimulus if it wants to preserve the fledgling recovery that has carried the Dow Jones Industrial Average back above 10,000. The U.S. unemployment rate officially hit 28-year high of 9.8% in September, according to the Labor Department. But that number grows to 16.8% when you add the number of "total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers," also known as the "underemployment" rate. When 16.8% of the workforce is unemployed or underemployed, any growth in gross domestic product (GDP) is likely to be severely constrained. And in this case, a protracted jobless recovery promises to extend the housing and banking crisis, put a damper on wages, and further reduce consumption, which is the traditional path to a sustained economic recovery. Read Full Article » Investment News Briefs With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world. More Insider Trading Arrests Coming; Icahn Offers CIT Bailout; Oil Pushes $80; Treasury Steps In To Support HFAs; N.Y. Times to Cut 100 Newsroom Jobs; Hasbro Shares Fall Amid Soft Sales, Inventory Concerns; Business IT Spending to Return to Growth in 2010 Federal investigators are planning to charge a minimum of 10 securities professionals for insider trading, Bloomberg News reported, citing people familiar with the matter. Some of those under investigations are linked to Galleon Group hedge fund manager Raj Rajaratnam, who was arrested Friday along with six others on charges of an insider trading scam that generated more than $25 million in illegal profits. Rajaratnam was originally going to be arrested this week as part of a broader sweep, but authorities expedited the process when they learned he bought a plane ticket to London on Thursday. Billionaire investor Carl Icahn said he's willing to loan ailing commercial lender CIT Group Inc. (NYSE: CIT) $6 billion to replace the debt exchange offer the company is attempting as a last-ditch effort to avoid bankruptcy. CIT acknowledged the letter stating Icahn's offer yesterday (Monday), saying it was the first indication it had of the outspoken investor's interest in providing alternative financing. Icahn said in a Bloomberg News interview there's "no question in my mind" he's CIT's largest shareholder, declining to say how much of the lender he held. Light, sweet crude for November delivery yesterday (Monday) once again reached a 2009 high, rising 1.4% to $79.61 on the New York Mercantile Exchange (NYMEX). "Oil has broken out," said Phil Flynn, vice president at futures trading and research firm PFG BEST Research told MarketWatch, adding that crude could reach $80 soon. Still, analysts said last week that a 2008-like price spike was unlikely amid high inventories and sluggish demand in the United States. The U.S. Treasury will begin purchasing securities from Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) that are backed by new housing bonds issued by local and state housing finance agencies (HFAs), which provide low-interest mortgages for low- and moderate-income families and fund the development of affordable rental housing. "Through the years, many low and moderate income Americans have been well served by state and local HFAs, but the housing downturn has hit these organizations too," said Treasury Secretary Timothy Geithner. Additionally, Fannie and Freddie will provide replacement credit and liquidity facilities available to HFAs that the Treasury says will help reduce the costs of maintaining existing financing for the HFAs. The New York Times Co. (NYSE: NYT) plans to eliminate 100 newsroom jobs at its flagship newspaper, offering buyouts to both union and non-union employees, The New York Times reported. Should not enough people take the buyouts, the newspaper will resort to layoffs. The move mirrors one The Times made in the spring of 2008, in which the paper eliminated 100 newsroom jobs, including 15 to 20 journalists. Newspapers are being forced to find new revenue streams amid declining ad revenue, which plunged 16.7% industry-wide last year. Shares of Hasbro Inc. (NYSE: HAS) fell 3.73% to close yesterday (Monday) at $28.42 after soft sales and growing concerns over shrinking retail inventories. The toy maker reported a net income of $150.4 million, or 99 cents a share on revenue of $1.28 billion for the quarter ended Sept. 27. That compares to a net income of $138.2 million, or 89 cents a share on revenue of $1.30 billion in the same quarter last year. Rival Mattel Inc. (NYSE: MAT) said retail inventories have fallen by "double digits" compared to this time last year, MarketWatch reported. Market research firm Gartner Inc. (NYSE: IT) said it expects business IT spending to fall 6.9% this year, the worst drop on record. The industry will return to growth next year, with spending totaling $3.3 trillion, a 3.3% rise from this year. "While the IT industry will return to growth in 2010, the market will not recover to 2008 revenue levels before 2012," said Peter Sondergaard, senior vice president at Gartner and global head of research. "2010 is about balancing the focus on cost, risk, and growth." In the meantime, technology companies will rely on consumer spending to carry them through the worst economic downturn since World War II. Read Full Article » Money Map Report Login » A Wonder That May Save The Planet The UK's Daily Mail called it, "A wonder...that may save the planet." Forbes predicts it will have the same economic impact oil has had. And Horacio Marquez has found a way to play it that could turn every $10,000 into $290,400. Click here to read Horacio's report while it's still available. 10/19/2009 Bernanke: Asian Consumer Spending, Cutting U.S. Deficit Are Keys to Avoiding Trade Imbalances 10/16/2009 Oil Prices Hit a 2009 High, but are Unlikely to Spike 10/15/2009 Two Reasons the Dow's Rally to 10,000 Will Keep Moving Ahead Feature Own Solid, 24-Karat Gold Bullion Bars... for Just $20 See More » The Week Ahead October 20 Housing Starts (09/09) PPI (09/09) October 21 Fed Beige Book October 22 Initial Jobless Claims (10/17)   Leading Eco. Indicators (09/09) October 23 Existing Home Sales (09/09) Worth Considering The Just-Released Formula for Predicting High-Yield Winners Buy, Sell, or Hold? by Horacio Márquez Insights on Income by Martin Hutchinson Inside Wall Street? by Shah Gilani When and How the U.S. Economy Will Recover Three Big Reasons Oil Prices Will Rally Back Big Time Alternative Energy Asia Commodities Europe Global Markets Gold/Precious Metals Oil Real Estate Technology U.S. Economy

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