Investigate Before You Invest
Planning for the future, saving money, and making careful investments are smart moves. Most financial professionals are honest and most investments are legitimate. Some are not. Dishonest sales practices and securities fraud is serious problems. One purpose of the securities laws (also called Blue Sky laws) is to ensure that investors are given information concerning all risks before they make an investment decision. Many problems and losses can be avoided by taking time to carefully review and evaluate possible investments.
What is a Security? Stocks and bonds, limited partnerships in real estate, oil and gas offerings, investment contracts, or an investment in a common enterprise with an expectation of profit to be derived from the significant managerial efforts of others are securities. Almost any sort of profit-making venture that depends on the efforts of the seller to realize a profit could be a security and may need to be registered with the securities commission
Investments have risks. Information is your best defense against fraud and dishonest sales practices. Before you sign an investment contract or put money into an investment, check it out. Make sure the investment professional and firm are registered with the SEC and licensed to do business in your state. And find out from your state's securities regulator whether the investment professional or her firm have ever been disciplined, or whether they have any complaints against them.
Be wary of promises of quick profits, offers to share "inside information," and pressure to invest before you have an opportunity to investigate. These are all warning signs of fraud. Ask your investment professional for written materials and prospectuses, and read them before you invest. If you have questions, now is the time to ask.