The Securities and Exchange Commission (SEC) shut down an alleged financial pyramid scheme that was being promoted on Facebook and Twitter this week. The alleged scam was run by Fleet Mutual Wealth and MWF Financial which combined did business as Mutual Wealth. According to the SEC, the business promised investors 2-3 percent returns every week by investing money into securities for only a few minutes at a time.
However, instead of making investments, the SEC says that the group moved investors’ money to offshore bank accounts for fake companies. It worked as a pyramid scheme because the group encouraged participants to sign up others in exchange for commissions and to promote the investment opportunity on Facebook.
“Mutual Wealth used Facebook and Twitter as well as a team of recruiters to spread a steady stream of lies that tricked investors out of their money,” said Gerald Hodgkins, an associate director in the SEC’s Division of Enforcement.
Pyramid schemes work largely because people trust their friends when they present them with a financial investment opportunity. This is true whether it’s in person or over Facebook. However, it’s up to you to take a closer look at the investment and deem if it’s legit or not. As with most things, if it seems too good to be true, it probably is, and investment returns of 2-3 percent per week certainly qualify as too good to be true.