Your Money: Protect yourself from investment scams

Before you invest your earnings, it is important to check for scams and verify credibility of the investment firm.


Ask questions, research the company, reach out to local investment firms and advisers and talk to other investors. It’s essential to take precaution with all investment opportunities.

Studies show that investment scams are on the rise over the past decade. Baby boomers in particular are more vulnerable to such schemes, as many are now managing their own retirement account.

In 2010, state securities regulators initiated more than 1,200 enforcement actions, including criminal complaints and cease-and-desist orders, involving investors ages 50 or older, according to the North American Securities Administrators Association. That was more than double the 506 cases in 2009.

The Financial Industry Regulatory Authority Investor Education Foundation, specializing in investment fraud, has valuable information to help sort through investment decision making.

FINRA has provided three key strategies you can use if you aren’t certain about a specific investment opportunity:

• Practice saying no. Simply tell the person, “I am sorry, I am not interested. Thank you.” Or tell anyone who pressures you, “I never make investing decisions without first consulting my___. I will contact you if I am still interested.” Fill in the blank with whomever you choose – your spouse, child, investment professional, attorney or accountant. Knowing your exit strategy in advance makes it easier to leave the conversation, even if the pressure starts rising.

• Ask questions. A legitimate investment professional must be properly licensed, and his or her firm must be registered with FINRA, the Securities and Exchange Commission or a state securities regulator, depending on the type of business the firm conducts. Ask for written verification and then check it yourself.

• Be extremely skeptical if the person promoting the deal says, “Don’t tell anyone else about this special deal!” A legitimate investment professional won’t ask you to keep secrets.

For more information on protecting yourself from investment fraud, visit



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