subject: Warning Signs Of Stockbroker Fraud [print this page] You are really excited: You have talked with a great stockbroker and, though the investment is a little complex, it sounds like the perfect investment for you. The stockbroker promises high returns at a low risk, and the returns should come soon--this time next year, you will be sitting on the beach somewhere.
The stockbroker is really trustworthy and has told you a lot about the other people who have succeeded using this same kind of investment. But, the stockbroker tells you that you need to act fast--this opportunity will be gone tomorrow so there is not a lot of time to have it reviewed by anyone. You need to get on board!
If this story sounds familiar to you in any way, be careful--you might be on the verge of falling prey to stockbroker fraud.
Anyone can fall victim to investment fraud. The best way to prevent stockbroker fraud from happening to you is to know the warning signs of a fraudulent investment. There are several major signs that should alert you to the validity of your investment:
-It sounds like the perfect investment: As the old adage goes, if it sounds too good to be true, it probably is. Be careful if the stockbroker promises quick, high returns at a low risk. Low risk investments usually take time to accrue substantial returns. If the stockbroker has tried to paint a picture of the good life that will follow your investment and has shared success stories of others who have invested with them, beware.
-You need to act fast: Fraudulent stockbrokers often pressure investors into acting quickly, claiming that the investment is a one-time, fleeting opportunity. They will likely discourage third-party review by other professionals, such as attorneys, claiming that there is not time for this kind of review. Professional stockbrokers encourage investors to take their time in reviewing investment options, especially when a large portion of their money might be involved. Third-party review should also be welcomed.
-The investment is unregistered: The stockbroker might have you convinced that the investment opportunity does not need to be registered with the Securities and Exchange Commission (SEC). This is simply not true. Most all investments must be registered with the SEC. You should always check yourself to see if an investment is registered before committing to it.
-You trust, even like, the stockbroker: A scamming stockbroker is most always charming, friendly, and warm. They may advertise their credentials before you can even ask, and these credentials will sound really good, but remember that these can be faked.
Fraudulent stockbrokers know how to use human emotion to their advantage, and can talk people into complex investment schemes that would, without the charm, seem absurd.
Always remember that you should make investment decisions after much thought and consideration, and that excited emotions can indicate a risky or even fraudulent investment.
Professional stockbrokers welcome and encourage you to take your time and welcomes outside review. It probably took you a long time to earn your money-- you do not want to lose it overnight.
