Investment pitches come at us from a variety of sources. Some arrive by telephone in the form of a telemarketer. Some arrive in your e-mail inbox. Some appear in an advertisement in your newspaper or favorite magazine.

Still others enter your living room late at night through your television in the form of an “infomercial.” And some even
come from a co-worker, friend or neighbor.

But no matter how you hear or read about these investment opportunities, be very careful. Although some may be legitimate offers, many of these investment opportunities are scams designed with the sole purpose of separating you from your money.

What You Should Know About Investment Fraud

Anyone can be a victim of investment fraud.

Although you may think only widows, retirees and low-income wage earners are the targets of investment fraud, swindlers do not discriminate. Professional athletes, successful business executives, political leaders, doctors, lawyers and even economists have all fallen victim to investment fraud.

In fact, some swindlers specifically target persons with deep pockets, while others deliberately seek out families that may have limited means or financial difficulties, figuring such persons may be particularly receptive to a proposal that offers fast and large profits.

Although victims of investment fraud can differ from one another in many ways, they do have one trait in common: greed that exceeds their caution.

Let’s face it. We all want to have more money – to pay bills, to send our kids to college, to travel, to retire comfortably. Sometimes that desire for money clouds our judgment, leading us to disregard what our common sense is telling us and believe instead only what we want to believe.

Fraud artists are skilled liars.

Swindlers are very good at sounding like they represent legitimate businesses. Never assume that you’ll know a scam when you hear one. Swindlers convincingly offer attractive investments, products and services, “sell” subscriptions, promote travel and vacation plans, and solicit donations…the list seems endless. Even if you already know the most common schemes, innovative swindlers constantly devise new ones.

No matter what questions, or how many, you ask…skilled swindlers have believable answers. That’s why sales pitches from persons or organizations that are unknown to you should always be carefully investigated before
you buy or invest.

Download Scams and Swindles: An Educational Guide to Avoiding Investment Fraud

PDF format, 576KB. © 2007 National Futures Association.

National Futures Association is a congressionally authorized self-regulatory organization of the United States futures industry. Its mission is to provide innovative regulatory programs and services that protect investors and ensure market integrity.

NFA has prepared this pamphlet as part of its continuing public education efforts to provide information to potential investors.

PUBLISHER
National Futures Association
800-621-3570 • www.nfa.futures.org
DESIGN
Lenz Design • Chicago, Illinois • www.lenzdesign.com
ILLUSTRATION
Philip Nicholson • Varberg, Sweden • www.illustrations.se

Be smart. Don’t be scammed!

RESOURCES

If the investment offer involves futures, contact NFA (www.nfa.futures.org) to see if the company is registered with the Commodity Futures Trading Commission (www.cftc.gov).

If the investment offer involves securities, contact the National Association of Securities Dealers (www.nasd.com) to see if the company is registered with the Securities and Exchange Commission (www.sec.gov).

You can also contact your states securities agency (available through the North American Securities Administrators Association at www.nasaa.org).

Additional Resources:

National Fraud Information Center
www.fraud.org

Alliance for Investor Education
www.investoreducation.org

Investor Protection Trust
www.investorprotection.org

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