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. 4 History-Making Wall Street Crooks
    Personal Finance

    4 History-Making Wall Street Crooks

  2. What Is A Pyramid Scheme?
    Active Trading

    What Is A Pyramid Scheme?

  3. Ivar Kreuger: Businessman Or Scam Artist?
    Entrepreneurship

    Ivar Kreuger: Businessman Or Scam Artist?

  4. The Ghouls And Monsters On Wall Street
    Retirement

    The Ghouls And Monsters On Wall Street

Hot Definitions
  1. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  2. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  3. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  4. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
Trading Center