Volume 7 Number 32 August 6, 2009

Florida Office of Financial Regulation Identifies Top Investor Traps and Tips to Help You Avoid Investment Fraud

In the tough economy, consumers can’t afford to take unnecessary risks with their hard-earned money

The Florida Office of Financial Regulation (OFR) today released the 2010 list of most commonly used cons or traps investors should avoid. Regulators found as the impact of the financial crisis continues along Main Street, investors seeking to jump-start their investment portfolios are most vulnerable and need to be wary of these popular scams.

“Investors should remember the speculative investments promising high returns are most often the ones that turn their hard-earned money into thin air,” said OFR Commissioner J. Thomas Cardwell. “We need to warn consumers not to be lured into get-rich-quick schemes. If it sounds too good to be true, or promises large returns in a short period of time, thoroughly investigate the investment and the person and firm selling them before investing.”

Commissioner Cardwell strongly encourages investors to familiarize themselves with the warning signs of investment fraud and independently verify any investment opportunity, as well as the background of the person and company offering the investment. OFR’s Division of Securities can provide detailed information about a firm’s, broker’s or investment adviser’s employment and disciplinary history. Investors should call OFR at 1-800-848-3792 for additional information. In addition, investors should learn as much as possible about the firm, individuals and investment so that they can be comfortable with and fully understand the deal and its risks.

“Knowledge, attention to detail and a healthy sense of skepticism are a triple threat to fight investment fraud,” said Franklin L. Widmann, OFR’s Director of the Division of Securities. “The Division and other state securities regulators can provide the public with detailed background information about those who sell securities or give investment advice, as well as about the products being offered. The more you are prepared, the better your chance of sidestepping a trap that can leave you in a financial hole for many years.”

Top 10 Investor Traps

The following products and practices deserve special scrutiny:



“Investors should do business with licensed brokers and advisers and should report any suspicion of investment fraud to OFR’s Division of Securities,” Cardwell said. “One call can protect your financial security and might prevent others from becoming victims.”

Investors are reminded that if a firm or person offering or selling securities or investment advice omits or misrepresents material information related to these investments causing investors to suffer a loss, it is unlawful. If you feel you have been a victim of investment fraud, you can also place a complaint through the Florida Office of Financial Regulation at www.flofr.com or by calling 1-800-848-3792.

To ensure that that your complaint is reviewed as quickly as possible, the following information should also be provided with the complaint:

The Office of Financial Regulation is committed to protecting Florida citizens by carrying out the banking, securities and financial laws of the state efficiently and effectively and to providing regulation of business that promotes the sound growth and development of Florida’s economy.