Two days ago, federal prosecutors unsealed charges against Bryan Lee in regard to an investment scam where Lee and the previously indicted Neil Chandran operated companies that purported to be developing metaverse technologies and cryptocurrencies.  They promised investors huge returns which they said would occur when their companies would be bought by Jeff Bezos of and Elon Musk.  Lee and Chandran managed to convince 10,000 people to invest more than 45 million dollars in these fraudulent companies.

Convicted Ponzi schemer Bernie Madoff who stole 50 billion dollars from unsuspecting victims may be the last person from whom you would accept investing advice, but in fact, his advice, as contained in a 2014 jailhouse interview Madoff gave to the Wall Street Journal is helpful to people hoping to avoid the fate of Madoff’s many victims. With great “chutzpah,” Madoff blamed his victims for their losses.  He said that his investors were “sophisticated people” who should have known better.  “People asked me all the time, how did I do it.  And I refused to tell them, and they still invested.  Things have to make sense to you.  You should ask good questions.”  About this he is correct. No one should ever invest in anything that they do not totally understand.

TIPS

The bottom line is that Bernie Madoff was right about one thing.  No one should ever invest in anything without totally understanding the investment and the inherent risks.   Cryptocurrencies and virtual reality products for the metaverse are extremely complicated.  No one should invest in companies involved in these activities unless you firmly understand what you are investing in.   You may want to check out the SEC’s investor education website at www.investor.gov. as well as the SEC’s website for information about cryptocurrencies. https://www.sec.gov/oiea/investor-alerts-and-bulletins/exercise-caution-crypto-asset-securities-investor-alert

Before investing with anyone, you should also investigate the person offering to sell you the investment with FINRA’s Central Registration Depository.  http://www.finra.org/industry/crd   This will tell you if the broker is licensed and if there have been disciplinary procedures against him or her.  You can also check with your own state’s securities regulation office for similar information.  Many investment advisers will not be required to register with the SEC, but are required to register with your individual state securities regulators.   You can find your state’s agency by going to the website of the North American Securities Administrators Association.http://www.nasaa.org/2709/how-to-check-out-your-broker-or-investment-adviser/

Anyone investigating Neil Chandran would have been able to find that he was a convicted felon and securities law violator.