Protect yourself from getting scammed

June 19, 2008 12:09:34 PM PDT
Tips to protect yourself from getting scammed: - Check out the broker with the Financial Industry Regulatory Authority (FINRA). To contact FINRA, either visit FINRA's BrokerCheck website at www.finrabrokercheck.org or call FINRA's toll-free BrokerCheck hotline at (800) 289-9999.

- Investment advisers must register with the SEC. To check whether they are registered, read their registration forms and the advisor's regulatory history on the Investment Adviser Public Disclosure (IAPD) website at www.adviserinfo.sec.gov/IAPD/Content/IapdMain/iapd_SiteMap.aspx.

- Find out whether the brokerage firm and its clearing firm are members of the Securities Investor Protection Corporation (SIPC) by visiting www.sipc.org .

- Beware if a brokerage firm has a similar name to another firm.

- Don't ever place a buy order on an introductory phone call.

- Don't be bullied into buying stock.

- If a broker makes you uncomfortable, lodge a complaint with the brokerage firm's compliance department, the SEC, and the National Association of Securities Dealers (NASD) and state regulators.

- Ask questions

Is this investment product registered with the SEC and my state securities agency?
How long has your firm been in business?
What training and experience do you have? What other firms have you been registered with? What is the status of those firms today?
Have you personally been involved in any arbitration cases? What happened? What is your investment philosophy?
Do you make more if I buy this stock (or bond or mutual fund) rather than another? If you weren't making extra money, would your recommendation be the same?
Can you provide me with some names and telephone numbers of your long term clients?
Do I have a choice on how to pay you? Do I pay you by transaction or is it a flat rate?


Load Comments