Morrison Cautions Main Street Investors
State Auditor John Morrison today cautioned Montana investors against making sudden and uninformed decisions amid the ongoing market volatility and unprecedented turmoil on Wall Street. Morrison also reminded investors about the important safeguards protecting their brokerage account assets.
“We know from past experience that con artists follow the headlines to prey on the worries and fears of everyday investors,” Morrison said. “With the current economic situation, state securities regulators are concerned that scammers are gearing up to promote various investment schemes with promises of big returns. If history is any guide, these investments will be worth less than the paper on which they are printed.”
The Montana State Auditor’s Office provides the following tips for investors:
· Contact the State Auditor’s Office with any questions about an investment firm, professional or product. Make sure that both the seller and investment are licensed and registered. If they are not, they may be operating illegally.
· Use common sense. Some things really are too good to be true. Get a professional, trusted third-party opinion when presented with investment opportunities that seem to offer unusually high returns in comparison to other investment options.
· Request written information that fully explains the investment, such as a prospectus or offering circular. The documentation should contain enough clear and accurate information to allow you or your financial adviser to evaluate and verify the particulars of the investment.
· If you participate in an employer-sponsored retirement plan, such as a 401(k) plan, get unbiased advice and guidance before making any significant changes to your long-term savings and investment strategy.
The State Auditor’s Office also reminds investors that the Securities Investor Protection Corporation (SIPC) maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms. SIPC acts either as trustee or works with an independent court-appointed trustee in a brokerage insolvency case to recover funds. Additional information about SIPC is available at www.sipc.org.