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Prime Bank & Offshore Investments call the Division at (801) 530-6600
Key Questions Before Investing
  • Is the security properly registered with the Utah Division of Securities or federal government?  If the company is properly registered, you should be able to find the company in the Division’s online database or the S.E.C.’s Edgar database. If the company says it is exempt, they should be able to provide you with a legal citation of the law that they are relying upon for exemption. If they cannot, the security is likely illegitimate and you should not invest.
  • Have you been offered some disclosure document?  To help you perform the proper due diligence before investing, you should be provided a private placement memorandum, private offering memorandum, or some other document that fully details information about the investment, including: its managers, its financials, its track record, its investment strategy, and the risks associated with that strategy. Like a mutual fund’s prospectus, an investment’s disclosure document should be substantial in length (typically 30 to 60 pages).
  • Have you been offered audited financials from the company?  Generally, audited financials are reviewed to assess the financial status of the company, including outstanding liabilities.
  • Is the person selling the investment licensed as an agent? Do they need to also license as an investment adviser?  Individuals selling investments in the state of Utah are almost always required to license as an agent. In many instances, where they are managing a pool of money or receiving compensation on the advice provided, they must also license as an investment advisers. To verify whether the promoter or fund manager is licensed, please contact the Utah Division of Securities.
  • Does the investment make sense?  If you cannot understand how the investment is supposed to earn money, do not be surprised if you lose your money. Some investments may be complicated, but they should ultimately make sense. The overall strategy of the investment should be disclosed in writing. After you have reviewed the written offering documents, have an unbiased, trusted adviser review them to ensure the investment makes sense and is not too good to be true.
  • Does the investment’s history of returns seem to be too good to be true?  The risk/reward principal dictates that the higher the return, the greater risk. Historically, a good rate of return is 7-8 percent per year (above inflation). An investment boasting a rate of return of 10-20 percent per month is not sustainable or viable. While such returns are suspect on face, even if they were accurate, they would reflect serious risks. In short, if it’s too good to be true, it probably is.
  • Have you researched the company and those running the investment?  Before investing you should research the principles and those running the investment. The first step may be a simple search on google.com or bing.com to find any information, but you should contact the Utah Division of Securities. You may also search other regulators, such as real estate or insurance. Greater due diligence may require looking for any court records for criminal or civil matters.

What are Prime Bank Investments?

Prime Bank Notes or Prime Bank Investments are investments which claim “special access” to programs or investments that are reserved for banks or other top financial institutions. These types of investments are usually represented to be overseas and yielding a high return in a short period with little or no risk. Only investors with the proper connections or financial net worth are told that they can participate. However, neither these investments nor the market described exist. Some promoters have begun avoiding using the term “Prime Bank” to avoid the appearance of fraud.

Common Features of Prime Bank and other Offshore Investments

Excessive Guaranteed Returns

Any investment offering high returns should be questioned. Investors should always question whether the returns promised are too good to be true and how such high returns are possible. Guaranteed high returns are a signature of Prime Bank fraud as well as offshore investments.

Sending your money offshore

Once your money has been wired offshore, it is difficult, if not impossible for your money to be repatriated. Moreover, most reasons for sending money offshore is to avoid taxes. This exacerbates the problem for victims who complain and assist securities regulators in uncovering fraudulent schemes in that there will often be tax implications for money sent off shore. Remember, once your money leaves the hands of U.S. financial institutions, it is extreamly difficult to trace where you money has gone.

Secrecy

Promoters of Prime Bank and Offshore Investments claim “special access” and require that knowledge of this investment should be kept confidential. Investors will often be told that if asked, bank officials would deny knowledge of these kinds of investments. Any investment where you must sign a non-disclosure or secrecy clause is most likely a fraud or exposes the investor to great risk.

Exclusive Opportunity

Investors should be very cautions any time a promoter describes an investment as exclusive, by invitation only, or only available to a few select individuals. This is often coupled with a sense of urgency to invest. If the investment is as successful as is claimed, why do they need your money and why won’t the opportunity be available tomorrow?

All investments offered in the State of Utah should be registered with the Utah Division of Securities or qualify for a state or federal exemption. Before investing please contact The Utah Division of Securities to confirm registration.

Concerns with Prime Bank and other Offshore Investments

Registration Concerns

A promoter who seeks investor money for Prime Bank, Offshore, or similar investments will typically require the investment to:

  1. be properly register under Utah’s Securities law;
  2. be exempt from registration under Utah law; or
  3. be a federal covered security, notice file in Utah.

In many cases, promoters fail to properly follow securities laws and offer unregistered securities to Utah investors, which is a violation of the law.

Fraud Concerns

Many promoters fail to provide investors with adequate disclosure documents. Some will mislead or misrepresent the information and risks in their disclosure documents. Rarely will disclosure documents be provided for a Prime Bank or Offshore Investment. Omission or misrepresentation of material information in the offer or sale of a security is considered securities fraud. Remember that once your money leaves your country, it is difficult to follow and rarely comes back to the investor.

Licensing Concerns

A promoter may or may not need to be securities licensed as a Broker-Dealer or Investment Adviser. Licensing is required anytime a sales agent or promoter sells a security and receives compensation or renders advice regarding a security for consideration.

Secrecy

Investors are frequently told that these types of investments must be kept a secret. This will often frustrate efforts to prosecute violators and return monies to victims in that the time period for bring actions against violators of the securities laws is limited. You should contact an attorney and notify a securities regulator as soon as you become aware of any wrongdoing or concerns with your investment.