Secretary of State Karen Handel Reminds Investors That Scams Often Hide Behind the Headlines

11/4/2009

Atlanta, GA (November 9, 2009) - Georgia Secretary of State Karen Handel today reminded investors not to allow recent negative economic news and stock market volatility lead them into high-risk, speculative investments, which may be nothing more than fraudulent schemes hiding behind today’s headlines.

“Scam artists follow the news and often prey on investors’ fears to promote bogus investments with promises of high return and little or no risk,” said Secretary Handel.

Secretary Handel also said investors nearing retirement are particular targets by phony investment schemes promising high returns to make up for losses in retirement accounts. “We are concerned that investors may allow uncertainty over current market conditions to lead them into fraudulent investment schemes that could weaken or devastate their financial position,
potentially wiping out the retirement security they worked so hard to build. A hasty decision often can make a bad situation worse.”

“Whether the markets are up or down, there are always those who will attempt to prey on the investing public,” Secretary Handel said. “Investors should guard against high-pressure sales pitches for unregistered securities and non-traditional investments such as promissory notes, foreign currency deals, natural resource investments, or other exotic financial products.”

Secretary Handel reminds investors to:

• Hang up on cold callers and delete unsolicited e-mail messages promoting investments opportunities.
• Contact their state or provincial securities regulator to check that both the seller and the investment are licensed and registered. If they aren’t, don’t invest. Contact information is available on the NASAA website.
• Insist on receiving detailed written information about any investment. Carefully review it or ask your financial adviser to evaluate it. Ask questions!
• Use common sense. Get-rich-quick promises are usually signs of investment fraud.
• If you suspect you’ve been scammed, report it to your state or provincial securities regulator. Your call could help others from losing money.
• Don’t invest on impulse. Before you invest your money, invest a little time.

Secretary Handel also noted that legitimate financial professionals, if serving their client’s interests first, generally do not recommend changes to investment portfolios based on short term economic news and market volatility. “Investors, especially those nearing or in retirement, should view with great skepticism any recommendation to liquidate a well structured, diversified investment portfolio to fund the purchase of an alternative investment product that may expose them to high commissions, high fees, complexity and undue risk,” Secretary Handel said.

The Georgia Secretary of State’s Securities Division is a member of the North American Securities Administrators Association, the oldest international organization devoted to investor protection. NASAA’ s membership consists of the securities administrators in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, the provinces and territories of
Canada, and Mexico.