High-Yield Investment Program - HYIP

AAA

DEFINITION of 'High-Yield Investment Program - HYIP'

A fraudulent investment scheme that purports to deliver extraordinarily high returns on investment. High-yield investment schemes often advertise yields of more than 100% per year in order to lure in victims. In reality, these high-yield investment programs are Ponzi schemes, and the organizers aim to steal the money invested.


This scam is also known as the "prime bank scam".

INVESTOPEDIA EXPLAINS 'High-Yield Investment Program - HYIP'

The SEC advises that there are several warning signs that investors can use to help avoid being victimized by high-yield investment program scams. These include excessive guaranteed returns, fictitious financial instruments, extreme secrecy, claims that the investments are an exclusive opportunity, and inordinate complexity surrounding the investments.

RELATED TERMS
  1. Securities Fraud

    A type of serious white-collar crime in which a person or company, ...
  2. Ponzi Scheme

    A fraudulent investing scam promising high rates of return with ...
  3. Pyramid Scheme

    An illegal investment scam based on a hierarchical setup. New ...
  4. Nigerian Scam

    A scam where the sender requests help in facilitating the transfer ...
  5. Bernard Madoff

    The former chairman of the Nasdaq and founder of the market-making ...
  6. Financial Action Task Force (FATF)

    An intergovernmental organization that designs and promotes policies ...
Related Articles
  1. Personal Finance

    4 History-Making Wall Street Crooks

    Find out how these Wall Street high-rollers landed themselves in hot water.
  2. Herbalife has been accused of running a pyramid scheme
    Active Trading

    What Is A Pyramid Scheme?

    The FTC announced it had opened an official investigation of Herbalife, which has been accused of running a pyramid scheme. But what exactly does that mean?
  3. Entrepreneurship

    Ivar Kreuger: Businessman Or Scam Artist?

    Match monopolist Ivar Kreuger started as a brilliant businessman, but his high-flying lifestyle led to some shady dealings.
  4. Retirement

    The Ghouls And Monsters On Wall Street

    Learn about some of the creepiest cases of fraud and the characters behind them.
  5. Retirement

    Affinity Fraud: No Safety In Numbers

    Ponzi schemes are just one example of this type of scam; learn how to avoid becoming a victim.
  6. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
    Professionals

    What is a SWOT Analysis?

    SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. SWOT analysis is a management tool used to identify strategies for success. It may be used to guide individual thinking, group ...
  7. Investing

    What's the difference between legal defalcation and illegal defalcation?

    Discover what is meant by the term ''defalcation'' and how it can be used in multiple contexts to describe illegal or legal activities.
  8. Financial advisors must lead the charge against cybersecurity risks, for their clients and for their own practices.
    Investing News

    Educating Your Clients About Cybersecurity

    Financial advisors must lead the charge against cybersecurity risks, for their clients and for their own practices.
  9. The USA Patriot Act gave the government more muscle to fight financial crime after the Sept. 11 terrorist attacks. Here's an overview.
    Investing News

    How The Patriot Act Works & Why Is It Important

    The USA Patriot Act gave the government more muscle to fight financial crime after the Sept. 11 terrorist attacks. Here's an overview.
  10. Investing

    What was the Mahonia company and why did it become the subject of a lawsuit?

    In 1992, J.P.Morgan went into the energy trading business by creating a venture company called Mahonia Limited. At least, that is how things appeared on paper. Mahonia was actually a type of ...

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center