William Penn Life, 2001 (36. évfolyam, 1-12. szám)
2001-08-01 / 8. szám
More tips on investing wisely and steering clear of fraud on the ‘Net — Download and print a hard copy of any on-line solicitation that you are considering. Make sure you catch the Internet address (URL) and note the date and time that you saw the offer. Save this in case you need it later. —Don’t assume that people on-line are who they claim they are. The investment that sounds so good may be a figment of their imagination, or they may be paid to promote it. —Ask the on-line promoter whether—and how much—they’ve been paid to tout the opportunity.-Ask for other sources of information at your local public library. For example, there are resources that provide information about the company, such as a payment analysis, credit report, lawsuits, liens, or judgments.-Before you invest, always obtain written financial information, such as a prospectus, annual report, offering circular, and financial statements. Compare the written information to what you’ve read on-line and watch out if you’re told that no information is available. —Don’t assume that your access provider or on-line service has approved or even screened the investment. Anyone can set up a web site or advertise on-line, often without any check of its legitimacy or truthfulness. —Check with a trusted financial advisor, your broker, or attorney about any investment you learn about on-line. Source: The Securities and Exchange Commission website. Web of deceit How to avoid Internet investment scams from the Securities and Exchange Commission website Investor enthusiasm for the Internet has created tremendous financial opportunities in recent years—for stock market fraudsters! That's because they often use the Internet to lure innocent investors into scams. You should be skeptical of investment opportunities you learn about through the Internet. When you see an offering on the Internet—whether it's on a company's website, in an online newsletter, on a message board, or in a chat room—you should assume it's a scam until you've done your homework and proven otherwise. Get the facts before you invest, and only invest money you can afford to lose. You can avoid online investment scams by asking—and getting answers to—these three simple questions: Is the investment registered? To find out, check the SEC's EDGAR database. Some smaller companies don't have to register their securities offerings with the SEC, so always check with your state securities regulator. You'll find that number in the government section of your phone book. Or call the North American Securities Administrators Association (NASAA) at (202) 737-0900 or visit NASAA's website. Many online investment scams involve unregistered securities. But the fact that a company has registered and files reports with the SEC doesn't guarantee that the company will be a good investment. Likewise, the fact that a company hasn't registered and doesn't file reports with the SEC doesn't mean the company is a fraud. You may be asking for serious losses if you invest in a small, thinly traded company that isn't widely known solely on the basis of what you read on a bulletin board posting or saw in an online newsletter. One simple phone call to your state regulator could prevent you from squandering your money on a scam. Is the person licensed and lawabiding? Find out if the person or firm selling the investment needs to be licensed. Call your state securities regulator and ask whether the person or firm is licensed to do business in your state and whether they have a record of complaints or fraud. 3Does the investment sound too good to be true? If it does, it probably is. High-yield investments tend to involve extremely high risk. Never invest in an opportunity that promises "guaranteed" or "risk-free" returns. Watch out for claims of astronomical yields in a short period of time. Be skeptical of "off-shore" or foreign investments. And beware of exotic or unusual sounding investments, especially those involving so-called "prime bank" securities. To learn more about "prime bank" securities, visit the Division of Enforcement's Prime Bank Fraud Information Center on the SEC website. Make sure you fully understand the investment before you part with your hard-earned money. Always ask for-and carefully read-the company's prospectus and latest financial statements. HU'll Money Links For more tips on avoiding online fraud, read “Internet Fraud: How to Avoid Internet Scams.” You can get this brochure by calling the SEC’s toll-free publications line at (800) SEC-0330 or visiting the “Internet and Online Trading” section of the SEC website at: www.sec.gov/investor/onfine.shtm/ 4 llillinm Penn lile, August 2001
