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How To

How to Prevent Investment Fraud

Contributor
By eHow Contributing Writer
(7 Ratings)

A little homework before choosing a stockbroker and investments - and a little caution when getting advice - will help protect your portfolio.

From Quick Guide: Researching Investments
Difficulty: Moderately Easy
Instructions

Things You'll Need:

  1. Step 1

    Select a broker or investment advisor who understands your financial objectives. Interview several to compare experience, education and professional background.

  2. Step 2

    Call the National Association of Securities Dealers at (800) 289-9999 to find out about the disciplinary history of the broker.

  3. Step 3

    Understand how the broker is compensated and what fees you will pay to purchase and sell securities and to maintain the account.

  4. Step 4

    Get written financial information such as a prospectus or an annual report before making an investment in stocks, bonds or mutual funds.

  5. Step 5

    Read these documents carefully; consider all the risk factors.

  6. Step 6

    Be wary of promises of quick profits, offers to share inside information, and pressure to invest before you have an opportunity to investigate.

  7. Step 7

    Talk with the firm's manager if you have a problem with your broker or your account.

  8. Step 8

    Contact the U.S. Securities and Exchange Commission, the National Association of Securities Dealers, or your state securities regulator if you cannot resolve the problem.

Comments  

oldstocks said

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on 3/16/2008 Check out what advisors, analysts, and fraudsters don't want you to know:

http://www.oldstocks.com/fraud.htm

Anonymous

Anonymous said

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on 7/2/2006 The only good investment adviser from a major Wall Street firm is a dead one! Only hire an adviser with no ties to Wall Street. Make sure your money is controlled by you and no one else. Have a meeting at his home, that way he may be a little less prone to steal your money if you know where his family lives.

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