Watch out: Another big Madoff-like scam is possible

by Michael Tarsala

You would think someone's BS detector should have triggered a lot sooner.

The SEC this week charged a California investment adviser with operating a $60 million Ponzi scheme under the name GLR Growth Fund.

The adviser's marketing materials claimed the fund was returning between 17% and 25% a year since 2003 by investing in common stock indexes including the S&P 500 (SPX) and the Dow Jones Industrials (DJI).

Even more outlandish, the fund supposedly returned 24% in 2008 -- the year of the Great Recession, when the S&P lost 38.5%.

Investment fraud is still happening all the time -- even after all the awareness following the fall of Bernie Madoff. According to the Center for Retirement Research at Boston College: 

• The FTC reports more than 1.5 million fraud complaints, up 62% in three years
• This trend will likely continue
• Consumers can best protect themselves by recognizing common fraud strategies

Back in late March, I had an interview with former SEC enforcer Pat Huddleston, author of The Vigilant Investor, who says another big Madoff-like scandal is possible -- and probably inevitable. He also provides details about some of the most common frauds now making the rounds.

You can see the full interview below.

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