A more thorough explanation:

Advance fee fraud is a type of scam where fraudsters trick victims into paying money in exchange for something of greater value. The scam can take many forms, but they all have some things in common. The fraudster will contact an investor and offer to buy their securities for an inflated price, even if the securities are worthless. They may also pretend to be a regulator or direct the investor to a fake website to build credibility. Once the investor pays the fee, the fraudster disappears, and the investor loses their money.

These scams often target foreign investors, but domestic investors can also be victims. Some warning signs of advance fee fraud include cold calls, high-pressure sales tactics, promises that seem too good to be true, and fake emails or websites. If a caller offers to buy securities for more than they are worth, it is likely a scam, and the investor should hang up. If the situation is unclear, the investor should do thorough research, including checking the broker's legitimacy using FINRA's BrokerCheck.

For example, a fraudster may call an investor and offer to buy their securities for a much higher price than they are worth. The investor may be directed to a fake website that looks like a legitimate brokerage firm to build credibility. Once the investor pays the fee, the fraudster disappears, and the investor loses their money.

Another example is a fraudster posing as a regulator and offering to help an investor recover money lost in a previous fraud. They may ask for a fee upfront, promising to return the lost funds. However, once the fee is paid, the fraudster disappears, and the investor loses their money.

Overall, advance fee fraud is a common scam that investors should be aware of. By recognizing the warning signs and doing thorough research, investors can protect themselves from falling victim to these scams.