The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Moominoid who wrote (37868)	8/14/2005 9:20:54 AM
From: redfish	Read Replies (1) of 306849

There was a scam a few years ago run out of Orlando that took in $500m before it got shut down. A wealthy friend of mine asked me to look at it after it got pitched to him ... the pitchers were legitimate local brokers and financial advisors. The fund offered a guaranteed minimum annual return of 10% or 12%, depending on how much you invested. In addition it paid a 5% commission to financial advisors for the money they brought to the fund. So they have to earn minimum 15% the first year to pay commission and guaranteed return. The explanation I got of how they could make all this money was they were involved in trading mortgage backed securities on a massive scale and could guarantee enormous profits because they had a "Cray supercomputer." Based on that silly little pitch they took in hundreds of millions ... I told my friend to steer clear of it but he invested a small amount and lost it.

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