With more people having investment portfolios than ever before, securities officials are warning investors of the increasing sophistication of investment advisers who steal money from unsuspecting clients. Victims may include everyone from the retiree next door to the experienced investor.
You should know that investment advisers are thinly regulated in a lot of ways and that being aware of securities fraud is vital as an investor in today’s securities market. Although most investment advisors are honest, those who are not see their ability to offer financial advice as a great way to line their own pockets. The danger is compounded by the average investor’s desire for maximum return and the growing number of individuals holding themselves out as qualified investment advisers nationwide.
Securities theft often involves an investment adviser or stockbroker converting client funds for his or her own personal use. A broker may, for example, forge signatures in order to authorize the transfer of funds or control of funds.
There are ways to protect yourself from the various acts of securities theft.
- Make sure you know where your money is being held. Generally, you should receive account statements from the custodian of the securities as well as from your investment adviser.
- Confirm that all transactions are ones you’ve approved. A major rule of thumb: Before turning over any of your hard-earned money, contact The National Association of Securities Dealers, or The Department of Financial Institutions Securities Division to check out the stockbroker and the investment.
If you believe that you may have been a victim of securities theft, you have certain rights which you should be aware of, rights which may provide you an opportunity to recover your losses from your stockbroker or brokerage firm.