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Investors, Beware!

The Bernie Madoff scandal shook the markets and rocked the investing world. Madoff was one of Wall Street's elite who lured in some of the biggest investment names in the United States, Asia and Europe, in one of the largest investing scams of all time. His recent conviction for defrauding thousands of investors in a Ponzi scheme has been an eye-opening warning to many investors that scams come in all shapes and sizes.

Many investors are always on the lookout for the latest strategies and opportunities to increase profits. Beginners are especially prone to this, even going so far as to pay for access to information — much like Madoff's investors did. Because the capital markets are so free and relatively unregulated, they are rife with scammers, spammers and jokers of all types.

I have noticed that there are some common denominators in their sales pitches. Although Madoff's investing scam appears more sophisticated, it actually follows a pattern established by smaller scammers selling "trading systems" on the Internet.

Here are four investing scam warning signs to watch out for…

Next: Warning Sign #1: Following an 'Elite' Model