Simple Ways to Protect Yourself from Investment Fraud

by Wall Street Fraud on April 27, 2011

Prevent investment fraudIn most cases, it is possible to detect a fraudulent investment by simply conducting due diligence. This means investigating the person offering you the investment as well as the investment itself.

To verify the authenticity of the broker’s credentials and the investment he or she is offering, it is helpful to understand the following:

1. To offer you a security, the person offering it must be a licensed broker or investment advisor. The agency that is charged with the registration of the broker is the Financial Industry Regulatory Agency (FINRA). For the investment advisor, it is the Securities and Exchange Commission (SEC)

2. To be legal, while there are some exceptions, investments must be registered with the Securities and Exchange Commission (SEC).

3. If the investment being offered is a hedge fund, Under the Dodd-Frank Act, effective July 21, 2011, if the hedge fund has 15 US-based clients or assets exceeding $150 million, it will have to be registered with the Securities and Exchange Commission.

4. If the investment being offered is a futures, the broker must be registered with the National Futures Association (NFA).

Once you have gathered the above information regarding licensing and registration, you will need to verify its accuracy. Today, this often involves a simple web search. For example, a broker background check may be quickly obtained on the FINRA website.

To get an idea of the information contained in a report, try searching for Bernie Madoff!

At Wall Street Fraud, we are dedicated to offering assistance to those who have been hurt by improper corporate or investment practices.

If you have been the victim of stock brokerage fraud, securities fraud, mutual fund fraud, stockbroker fraud, annuities fraud, or any other type of investment fraud, please contact us today for a free case evaluation. Our talented and aggressive legal and professional staff is eager to help you recover your losses.

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