In a world where financial opportunities seem to lurk around every corner, a recent case in the Czech Republic serves as a stark reminder of the importance of due diligence. Ondřej Janata, the founder of the alternative investment fund Growing Way, allegedly defrauded over 4,000 people of 1.5 billion crowns (approximately $67 million) by promising high returns. This case is not isolated, prompting experts to emphasize the need for investors to follow basic rules when considering where to put their money.
First and foremost, potential investors should verify if the fund is registered with the Czech National Bank, which ensures regulation and investor protection. This can be easily checked on the central bank’s website. Similarly, advisors and companies should be listed in the register of investment intermediaries. “If they’re not there, terminate negotiations immediately,” warns Jan Brejl from Partners Group.
Experts recommend choosing funds from reputable investment companies and managers with a proven track record. While new funds aren’t necessarily a bad choice, they require more expertise from the investor. For the average client, sticking to strictly regulated and supervised open-ended mutual funds and ETFs is advisable.
A common tactic used by fraudsters is the promise of unusually high returns. “A warning light should always go off when high yields are promised,” cautions Marek Macura from BO! Finance. Scammers often try to circumvent regulations by offering unregulated products with enticing offers.
To protect themselves, investors should take time to consider offers and consult with qualified professionals. They can verify a fund’s performance on the investment company’s official website or independent investment platforms. The key is to focus on long-term performance, which shows how the fund has fared in various market conditions.