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Newspaper Ads With Very High CD Rates

Tuesday, July 20, 2010 - 5:26 AM
In June, Oklahoma issued this press release on its civil action against one of those financial firms that advertise very high CD rates in the newspapers. The state was alleging the fraudulent sale of unregistered investment interests. The press release also describes the firm's actions related to these CDs. Here's an excerpt:
The Department initiated its investigation based on newspaper advertisements run by Firstar Financial Group of Central Oklahoma, LLC. The advertisements promote certificates of deposit issued by FDIC-insured banks that purportedly offer the highest certificate of deposit rates in the country. To achieve the yield advertised, Firstar Financial must contribute additional cash on behalf of the investor.

Firstar Financial Group of Central Oklahoma, LLC is affiliated with First Fidelity Financial Group, LLC located in the state of Florida. First Fidelity Financial Group, LLC promotes a marketing concept to entities across the country that involves the packaging of bank certificates of deposit with promotional incentives resulting in a higher yield to investors.

The Arkansas Securities Department has recently issued a cease and desist order for a company offering a similar investment scheme. The FDIC is currently warning banks to be aware of third party referrals that are contributing their own cash to make up the difference between the banking institution’s actual interest rate and the advertised above-market rate.

I have more on this issue at the post Beware of an advertised CD rate far above the competition.
Ken TuminKen Tumin5,473 posts since
Nov 29, 2009
Rep Points: 125,800