Fraud, Greed or 'Unsuitability'?Sometimes investment losses aren't produced by fraud, but they are accelerated by both greed and ignorance. People want to believe they can outperform the market. And some newsletter writers, brokers and advisers are only too happy to make money off that desire. Then who is to blame? Chicago attorney Andrew Stoltmann specializes in representing investors in lawsuits. He notes that investors who haven't actually been the victims of fraud might also have legitimate claims these days. Older investors who have lost a significant portion their assets might be able to claim their advisers sold them funds or investments that were not "suitable" for their situation.
Check Before Writing a CheckIt's far wiser to be sure than to sue later. So here are some ways you can check the records of the people who might ask for your money for an investment opportunity.
- FINRA.org: This is the self-regulatory body of the securities industry. There's a tool called "BrokerCheck" that allows you to look up a securities firm or individual broker, and check for securities violations in the past.
- AdviserInfo.sec.gov: Since investment advisers do not necessarily have to be registered as brokers, you'll also want to check out the SEC's Web site for any registered investment adviser's background. Don't give your money to anyone who isn't registered with the SEC.
- Google: This is the simple way to start checking someone out. Just Google the name or company name. You may find postings on a complaint board, alleging fraud or mismanagement. That's just word-of-mouth, of course, but it is a warning that should trigger further investigation.