Since December 2012, we've seen a heightened number of High Yield Investment Programs (HYIPs) being solicited to Pinnacle clients and friends.

According to the Financial Industry Regulatory Authority (FINRA):

HYIPs are unregistered investments created and touted by unlicensed individuals. Typically offered through slick (and sometimes not-so-slick) websites, HYIPs dangle the contradictory promises of safety coupled with high, unsustainable rates of return—20, 30, 100 or more percent per day—through vague or murky trading strategies.

According to recent law enforcement cases, many operate as Ponzi schemes, using payments from today's recruits to pay "interest payments" to yesterday's investors or "referral" fees to those who recruit new members. The Federal Bureau of Investigation recently reported that the number of new investigations in this area during fiscal year 2009 increased 105 percent over fiscal year 2008.

Pinnacle recommends that clients do additional due diligence and caution strongly against investing in any HYIP. For guidance and advice on your particular investing needs, please contact your financial advisor.

More information
For more information and additional references of HYIP scams, consider the articles below:

• HYIPs—High Yield Investment Programs Are Hazardous to Your Investment Portfolio (FINRA)
• ZeekRewards Receiver Recovers $300M, Asks Affiliates To Surrender Gains (Forbes)