
Investment Fraud
Course

Protecting Yourself from Financial Fraud
About This Course
“Have I got a deal for you?” When you hear these words, you may listen with extra caution. But even self-reliant, college-educated individuals with past experience in finance fall victim to fraud. Con artists use persuasion tactics to get to know their victims, gain their trust, and bilk them out of thousands of dollars’ worth of savings.
Help protect yourself from those intending to do you financial harm. Here you’ll learn about fraud persuasion tactics and hear first-hand how con artists perpetrate scams. Based on material supplied by the Financial Industry Regulatory Authority (FINRA) Foundation, this course provides fraud-spotting know-how that could give you the upper hand.
Duration
Approximately 20 minutes
Instructors
- Pattie Christensen, ChFC, RICP, Vice President-Education
- Janet Todd, Ph.D., Manager of Curricula
Additional Details
“If it’s too good to be true, it is.” That phrase is especially true for investments. Trust your instincts and follow two cardinal rules: ask a lot of questions and research, research, research. Fraudsters are counting on you not to investigate before you invest.
Take the time to do your own independent research. Be sure you understand a company’s business and its products or services before you invest. Know how you are going to make money on the investment. Stay away from investments you don’t understand. Here are a few simple tips and red flags:
- Know the salesperson. Spend time checking out the salesperson even if you already know the person socially. Are they licensed to sell securities in your state? Have they or their firm had run-ins with regulators or other investors? Check out their disciplinary history using the SEC’s and FINRA’s free online databases. Your state securities regulator may have additional information.
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Be wary of unsolicited offers. Be especially careful if you receive an unsolicited pitch to invest in a company or see it praised online but can’t find current financial information about it from independent sources. Common frauds are:
- — “Pump and dump” schemes, where the promoters urge investors to buy a stock with a fast-rising price only to sell their shares when the price is high, leaving the investors with a worthless stock.
- — International or “off-shore” investment recommendations. If something goes wrong, it’s harder to find out what happened and to locate money sent abroad.
Red flags for fraud and common persuasion tactics:
How do successful, financially intelligent people fall prey to investment fraud? Researchers have found that investment fraudsters hit their targets with an array of persuasion techniques
Tips & Resources - Investment Fraud
- For more about information see Ask Questions from Investor.gov.
- Look for the company’s financial statements on the SEC’s EDGAR filing system. You can also check out many investments by searching EDGAR.
- The SEC’s investor site - www.investor.gov
- Financial Industry Regulatory Authority (FINRA)
- North American Securities Administrators Association (NASAA) listing of State Regulators
- The SEC complaint hotline (800)732-0330
- Research your sales person and their company on FINRA.org
Learning Topics:
This material is for informational purposes only and is not intended as investment, tax, financial, legal or other advice. Your personal decisions should be based on the recommendations of your own professional advisors.
Unless otherwise noted, websites referenced herein that are outside the www.cpg.org domain are not associated with The Church Pension Fund and its affiliates (collectively, the Church Pension Group) and the Church Pension Group is not responsible for the content of any such websites.