High-Yield Investment Programs (HYIP) are unregistered investments typically run by unlicensed individuals—and they are often frauds. The hallmark of an HYIP scam is the promise of incredible returns at little or no risk to the investor.

An HYIP website might promise annual (or even monthly, weekly, or daily!) returns of 30 or 40 percent—or more. Some of these scams may use the term “prime bank” program. Fraudsters may use social media to promote an HYIP website or may encourage investors to use social media to share information about a HYIP website with others. If you are approached online to invest in one of these, you should exercise extreme caution—they are likely frauds.

In New York State, High-Yield Investment Programs (HYIPs) are generally considered to be high-risk and potentially fraudulent investment schemes. These programs often promise unrealistically high returns with little to no risk, which is a significant red flag for investment fraud. New York, like other states, is subject to federal securities laws, which require investment programs to be registered with the Securities and Exchange Commission (SEC). Unregistered investments run by unlicensed individuals are illegal. The New York State Attorney General's office actively pursues cases of investment fraud and operates under the Martin Act, which is one of the country's oldest and most stringent anti-securities fraud laws. The Martin Act allows the Attorney General to both pursue criminal charges and levy civil penalties against individuals and entities that engage in fraudulent investment activities. New Yorkers are advised to be extremely cautious with online solicitations for investments, especially those promising high returns with little to no risk, and to verify the registration and licensing status of any investment program with the SEC or the New York State Department of Law, Investor Protection Bureau before investing.