SCAM ALERT Investment Scams

TYPICAL SCAM:

Mrs. Johnson had never participated in decisions regarding the familyís investments until her husband passed away. Confusing monthly statements, tax documents, and news reports about the condition of the stock market began to plague her. When she received a phone call from a friendly reassuring young man who promised that he "would take care of everything" she jumped at the opportunity to give this burdensome responsibility to an "expert." After spending several hours reviewing her paperwork and admiring the family photos, the financial consultant convinced Mrs. Johnson to invest in a real estate development. He guaranteed her much higher returns than any of her friends were making on their investments, but seemed insulted when she asked for a prospectus and more information about his business. Not wanting to offend this nice man who had spent so much time on her paperwork, she agreed to turn over full control of her retirement assets. The following day a courier arrived to pick up the large check she had agreed to give to the consultant.

TIPS FOR AVOIDING FRAUD:

To check credentials or report investment fraud:

National Association of Securities Dealers at 1-800-289-9999

California Department of Insurance at 1-800-927-4357

California Department of Corporations at (213)576-7500


 

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