Do you know how to protect yourself from the next Bernie Madoff when you choose a broker or make an investment? Attorney Lee Holland, of Tarlow, Breed, Hart & Rodgers, P.C. of Boston, MA, firmly believes in the age-old adage that if an investment opportunity sounds too good to be true it probably is.
However, Attorney Holland, who is also a Public Arbitrator for the Financial Industry Regulatory Authority (FINRA), the largest independent regulator for all securities firms doing business in the United States, urges investors to go a step further to arm themselves against the potential of investment fraud.
“Education and information are the best tools against possible investment fraud. As a FINRA arbitrator I see the aftermath of poor choices made by both investors and financial industry professionals. As a result of this experience, I have become a strong proponent of promulgating information to better educate those on both sides of the investment equation and have found FINRA to be a great educational resource,” explains Holland.
Despite the high profile cases of investment fraud in the headlines, the potential for new fraudulent investment schemes may increase as investors, eager to recoup their losses in times of continued economic uncertainty, fall prey to a new generation of scam artists.
To help avoid investment fraud:
1. Verify the license of anyone promoting an investment opportunity:
- For brokers check www.FINRA.org
- For investment advisors visit www.adviserinfo.sec.gov
- For insurance agents check your state insurance department
- For all sellers check with your state securities regulator
2. Verify that an investment is registered:
- Check investment registrations at www.sec.gov/edgar.shtml
3. Be aware of the warning signs of investment fraud:
- Unreasonable guarantees
- Unregistered products
- Promise of no fluctuations in returns
- Complicated investment strategies
- Undocumented securities or stocks
- Incomplete or inaccurate account statements
- Pushy salespeople warning you must “act now”
4. Avoid fitting the investment fraud victim profile found in a 2007 FINRA survey:
- Victims often own high-risk investments, including penny stocks, promissory notes, futures, options or private investments in foreign currency;
- Victims tend to rely primarily on friends, family, co-workers for investment advice (70 percent)
- Victims can be too open to new investment information (for example, three times as many victims went to a free investment seminar than the national sample)
- Victims may fail to check the background of an investment or a broker
- Victims are often unable to spot persuasion tactics used by fraudsters
Holland urges all investors to invest their time becoming better educated, before investing their money, to avoid the risk of becoming a future victim of investment fraud. Attorney Holland, an Associate in Tarlow, Breed, Hart & Rodgers’ Litigation Group, has extensive experience with alternative dispute resolution, both as an advocate and as a neutral.
FINRA, the Financial Industry Regulatory Authority, is the largest independent regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through comprehensive regulation. FINRA touches virtually every aspect of the securities business - from registering and educating all industry participants to examining securities firms; writing and enforcing rules and the federal securities laws; informing and educating the investing public; providing trade reporting and other industry utilities; and administering the largest dispute resolution forum for investors and firms.
About Tarlow, Breed, Hart & Rodgers, P.C.
Formed in 1991, Tarlow, Breed, Hart & Rodgers, P.C. is committed to providing high quality, comprehensive legal services to its clients. Featuring a breadth and depth of experience and perspective usually found only at larger law firms, Tarlow, Breed, Hart & Rodgers. P.C. offers sophisticated legal counsel to entrepreneurs, businesses, individuals, families, and institutions.
Tarlow, Breed, Hart & Rodgers’ areas of expertise include corporate law, employment matters, mergers and acquisitions, litigation and dispute resolution, estate planning, taxation, real estate, bankruptcy, and municipal law.
The offices of Tarlow, Breed, Hart & Rodgers, P.C. are located at 101 Huntington Avenue, Prudential Center, in Boston, MA 02199. For additional information, or to arrange for a consultation, please call 1-617-218-2000, e-mail firstname.lastname@example.org, or visit www.tbhr-law.com.