How to Tell an Investment from a Fraud

The difference lies not in the polish of the presentation or the size of the promised return, but in the answers to a couple of verifiable questions: where the money for the payout physically comes from, and who holds what you have bought. In a genuine investment the payout is made by somebody else's business out of its revenue, or by a budget out of its income, and the asset you bought is recorded in your name on the books of a licensed depository or registrar. In a fraudulent scheme the payout is made by the next participant out of their contribution, and the "asset" exists only as a line in the organiser's client account. Everything else — licences, contracts, charts — derives from these answers, and it is these answers that need to be checked.

Name the payer

The quickest test is to ask who exactly pays, and out of what revenue. With a share, the payer is the issuer; the decision to pay is taken by the shareholders' meeting and is published in advance. The nearest decisions can be seen in the dividend calendar — {{dividend_calendar|limit=5}}. With a bond, the payer is the borrower, and the size and dates of the coupon are fixed in the terms of the issue before you ever buy; with OFZ the borrower is the state. A fund unit has no payer in this sense at all: its value moves with the portfolio, and that is normal.

If the question "who pays" is answered with talk of "arbitrage", a "pool", an "algorithm" or a "proprietary strategy", the payer has not been named. And when the payer is not named, it almost always turns out to be the next depositor — which is precisely the structure of a pyramid scheme, covered by Article 172.2 of the Russian Criminal Code and Article 14.62 of the Russian Code of Administrative Offences.

Whose asset it is and where it is recorded

A purchase on the exchange leaves a trace in records that do not depend on whoever sold you the idea. The security lands in your custody account, a statement confirms your ownership, and the issuer reports to the whole market at once — its figures sit in public financial statements rather than arriving in your messenger. An instrument card such as {{instrument:SBER}} gathers this data from the same public domain.

The sign of a substitution: your "portfolio" is visible only inside the organiser's app or website, and what you can withdraw is not the security but only money — and only with the organiser's consent. The same applies to handing funds to a "trader" on their own account against a written receipt: whatever the receipt says, the trader owns the asset, and you hold a claim on a person whose solvency you have no means of checking.

A promise without risk is a legal marker, not a matter of taste

A professional market participant has no right to guarantee a return on securities transactions, and this is not a nicety of wording but a regulatory requirement. So the phrase "fixed return, no risk", applied to shares, futures or currency speculation, by itself places the person you are talking to outside the legal field. A separate confusion arises from mixing up purposes: a return without market risk does exist in a bank deposit, but a deposit solves a different problem from a portfolio — this is covered in detail in the article "Savings and Investments".

Checks to make before transferring money

• Licence. A broker, an asset manager, a forex dealer and a fund's management company must all appear in the Bank of Russia's registers. The same place publishes the list of companies found to show signs of illegal activity.
• Matching names. A common trick is the clone: the website and the name are almost the same as those of a well-known participant, but the payment details belong to a different party, often an individual or a foreign entity. Compare the taxpayer identification number in the contract with the number in the register.
• The contract in full. A legitimate brokerage service agreement contains a risk disclosure statement and a procedure for withdrawing funds. If you are not given the document before paying, there is nothing to assess.
• How clients are recruited. A reward for bringing in acquaintances, urgency "until the end of the week", a private chat with a "personal analyst" and a ban on discussing the terms openly — this is not marketing but a way of getting ahead of your checks.
• The path of the money. A transfer to a private individual's card, in cryptocurrency or through a payment intermediary, instead of settlement through an account with a licensed participant, cuts off the possibility of getting the money back.

The grey zone: when both sides are telling the truth

Not every loss is a deception. The public market does not promise a profit: a price falls, an issuer cancels a payout, a fund closes a strategy — and that is a lawful outcome which the contract warned about. It is useful to distinguish a loss from a seizure: in the first case your asset is still in place but is worth less; in the second there is no asset. A non-public investment in somebody else's business stands apart — a loan to an acquaintance, a stake in a project, direct participation in a foreign company (foreign direct investment). It may be entirely honest, but you can verify it only through the company's own documents, and the protection here is weaker than on the exchange. If it is unclear which of these mechanisms you are looking at, the terminology is explained in the site's glossary.

If the money has already been transferred

Sending more funds "to unblock the withdrawal" is pointless: a demand for an additional payment after a withdrawal has been refused is the final stage of the scheme, not a bureaucratic hitch. The useful steps come in a different order: save the correspondence, the payment details, screenshots of the client account and the payment documents; file a complaint with the Bank of Russia through the online reception on its website; submit a report to the police citing Article 159 of the Russian Criminal Code and, where there are signs of a pyramid scheme, Article 172.2 of the Russian Criminal Code; notify the sending bank if the transfer is recent. The likelihood of recovery depends on speed and on whether the money is still within the Russian payment system, and it is more honest to say so plainly: the site has no statistics on recovery in such cases, and we cannot promise an outcome.