The Wisconsin Department of Financial Institutions today released its annual list of financial products and practices that threaten to trap unwary investors, many by taking advantage of investors troubled by lingering economic uncertainty and volatile stock markets.
“Con artists follow the news and seek ways to exploit the headlines to their advantage while leaving investors holding an empty bag,” said DFI Secretary Peter Bildsten.
Bildsten said headline-related investor complaints reaching state and provincial securities regulators include questionable claims, such as: “Realize safety and appreciation in gold;” “Wave energy: the future to power our homes;” “Synthetic fuels take the oilman out of our pockets;” and “Invest in foreclosed homes, help others and make a fortune!”
“Promoters often offer investors an opportunity to get in on the ‘ground floor’ of new technology or ideas to help others and make a great economic return,” Bildsten said.
The following alphabetical list of the Top 10 financial products and practices that threaten to trap unwary investors was compiled by the North American Securities Administrators Association, of which DFI is a member. Details are available on the DFI website at www.wdfi.org.
- PRODUCTS: distressed real estate schemes, energy investments, gold and precious metal investments, promissory notes and securitized life settlement contracts.
- PRACTICES: affinity fraud, bogus or exaggerated credentials, mirror trading, private placements and securities and investment advice offered by unlicensed agents.
Patricia Struck, administrator of the DFI Division of Securities, urged investors to learn 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. DFI provides detailed background information about those who sell securities or give investment advice, as well as about products being offered.
“Investors should do business only with registered brokers and investment advisers and should report any suspicion of investment fraud to us,” Struck said.
Additional information on how to guard against investment fraud is available on the DFI’s website at www.wdfi.org or by calling the DFI at 1-800-472-4325.
