Steps You Can Take to Avoid Investment Fraud
When it comes to your hard-earned money it’s important to make sure that you invest it wisely and safely. Unfortunately, there are always schemes and scams trying to take that money away from you under the guise of opportunities to increase your wealth. At the law firm of Colling Gilbert Wright & Carter, our experienced stockbroker fraud attorneys are here to help you in your time of need if you’ve been the victim of investment fraud.
Stockbroker and investment fraud can come in many different forms. Often it’s intentional but it sometimes can happen unintentionally as well. Regardless of intention, when you’re the victim of fraud it can seriously affect not only your finances but your personal well-being.
While we’re here to assist you if you’ve fallen victim to investment fraud, we also want to educate you before you invest so that you may avoid any potential scams. The following list is a compilation of tips from the Securities and Exchange Commission (SEC) to help you invest wisely. These tips include:
- Ask a lot of questions: Before you invest, it’s good practice to ask your potential broker a lot of questions about their practices and experience, personally investigate their background, and ask for references. Those who wish to fraud you are counting that you’ll not do this type of investigation.
- Research the broker or company: During your investigation, it’s a good idea to research a broker or company’s products and services before handing them your money. You can check out a company’s financial statements and investments by searching the SEC’s EDGAR filing system.
- Research the salesperson: If a specific person is telling you about an investment, do your due diligence and research that person. It’s a good idea to check if the securities salesperson is licensed to sell securities in the state where you live and if they’ve ever had issues with regulators or other investment people. You can find out information by checking the SEC’s and FINRA’s online databases as well as your state’s securities regulator.
- Beware of unsolicited investments: Always try to find independent sources of information, especially for any unsolicited offers to invest in a company or foreign or off-shore investments.
- Use caution online: Fraudsters often try to use scams online and in social marketing sites. You can view tips on protecting your social media accounts on the SEC’s website.
- Too good to be true schemes: Beware of investment claims that use language such as “incredible gains,” “breakout stocks,” or “huge upside with nearly no risk” as these are often signs of bad investments or fraud. If it’s too good to be true it often is.
- Beware of guaranteed returns: Every investment brings with it a degree of risk. Safer investments generally yield lower returns while riskier investments often yield greater returns. Be wary of any person guaranteeing returns.
- Sending money immediately: Many scams and frauds work on the premise that an opportunity is only available for a limited time and they need your money right away. Always take the time to thoroughly investigate and research your investment.
- Beware of free: Many frauds and scams will try to lure you in with free investment seminars or luncheons in which they ask you to invest in their product or company. Again, never invest without thoroughly researching the individual and/or the company before giving them any of your money.
As you can see, there are many ways in which fraudsters will try to scam you of your money through bad or outright fake investment opportunities. The best course of action you can take is to always take time to research and investigate any investment opportunity that you are considering. Taking the extra time can be the difference between a sound investment and a bad one.
If you would like to learn more about stockbroker or investment fraud, or have been the victim of fraud yourself, please call us today at 407-712-7300 to schedule a free consultation with our experienced Orlando stockbroker fraud attorneys. We proudly represent investors nationwide.