Firm offers tips to avoid brokerage fraud
Published 9:00 pm Saturday, December 13, 2003
Tips from the Securities Investor Protection Corp., which is warning the public about a new fraud scheme whose perpetrators impersonate brokerage firms on the Internet:
If a proposition sounds too good to be true, it probably is. Ask yourself why someone would pay you a premium for poorly performing stocks. Be wary when someone tells you a deposit is required to sell stock.
Before dealing with any broker or brokerage firm for the first time, do your homework. Check out brokers’ background and disciplinary history by contacting your state securities regulator or online at the National Association of Securities Dealers’ BrokerCheck at www.nasdbrokercheck.com.
If you fall victim to a phony brokerage scheme or are contacted by one, report it the authorities. Contact the Securities and Exchange Commission by e-mail at enforcement@sec.gov or your state securities regulator. To find the latter, go to the North American Securities Administrators Association’s Web site at www.nasaa.org/nasaa/abtnasaa/find_regulator.asp. Be sure to put details of your complaint in writing, either on paper or electronically.
Educate yourself about investment fraud. See "Protecting Yourself Against Fraud" at SIPC’s Web site at www.sipc.org/yourself.html.
Remember that SIPC cannot protect you against fraud; it only insures investors against bankruptcies of brokerage firms.
Copyright ©2003 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
