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Investors should be particularly wary of investment opportunities that promise extraordinary or virtually guaranteed returns, or whose underlying businesses cannot be independently verified, SIAS said.<\/span><\/p>\n They should also be cautious of schemes that encourage participants to recruit friends, relatives and acquaintances in exchange for unusually high commissions or advancement through different levels of an organisation.<\/span><\/p>\n A scheme is not necessarily legitimate simply because it has supposedly operated for many years, or because some participants may have initially received payments.\u00a0<\/span><\/p>\n This is because \u201cone of the defining characteristics of Ponzi- and pyramid-type arrangements is that early participants may receive money funded by later participants,\u201d SIAS said.<\/span><\/p>\n Such payments can create the impression that an investment is genuine and encourage existing members to introduce others to the scheme.\u00a0<\/span><\/p>\n This becomes unsustainable when the flow of new money slows or stops and the entire pyramid structure collapses, SIAS explained.<\/span><\/p>\n Investors should also be extremely wary of claims that an opportunity is connected to a government agency or major national development project but is supposedly available only to a privileged group of individuals, the association said.<\/span><\/p>\n A genuine government-backed investment should be capable of independent verification through official channels.\u00a0<\/span><\/p>\n Investors should never accept photographs, presentations, documents, testimonials or statements made by recruiters as sufficient proof.\u00a0<\/span><\/p>\n \u201cSIAS is particularly concerned when recruitment takes place through personal relationships,\u201d the association said.<\/span><\/p>\n Investors naturally place greater trust in friends, colleagues and family members, the association noted.<\/span><\/p>\n \u201cHowever, the person recommending the investment may himself genuinely believe in the scheme and may not realise that he has become part of the mechanism through which new participants are recruited,\u201d SIAS said.<\/span><\/p>\n \u201cRemember: friendship is not due diligence.\u201d<\/span><\/p>\n Before transferring any money, investors should ask who is holding their money, how returns are generated, whether the investment is regulated and whether they can withdraw their funds freely, SIAS said.<\/span><\/p>\n \u201cIf satisfactory and independently verifiable answers are not available, investors should walk away and not stay because they are tempted by high returns,\u201d SIAS said.<\/span><\/p>\n