Presented by By Nancy Boudreaux Investor Education Trainer OFI Louisiana O ffice of F inancial I...
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Presented by By Nancy Boudreaux Investor Education Trainer Louisiana O Office of F Financial I Institutions Guard Guard Rails Rails Protecting Your Protecting Your Community Community From From Investment Fraud Investment Fraud
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Transcript of Presented by By Nancy Boudreaux Investor Education Trainer OFI Louisiana O ffice of F inancial I...
Presented by
By Nancy BoudreauxInvestor Education Trainer
Louisiana OOffice of FFinancial IInstitutions
Guard RailsGuard RailsProtecting Your Community Protecting Your Community
From From Investment FraudInvestment Fraud
33A system designed to
keep vehiclesvehicles from straying into dangerous areas
An Action Plan designed to keep investorsinvestors from straying
into dangerous areas
Why listen?Why listen?
NASAANASAA FINRAFINRA IPTIPT
FBIFBI CFPBCFPB AARPAARP
Investor EducationInvestor Education
““Main Street” InvestorsMain Street” Investors
State Securities RegulatorState Securities Regulator
Investment ProfessionalInvestment Professional
Wake up!Wake up!
55+
Wise up!Wise up!
High profitHigh profit
10
Low riskLow riskLiquidLiquid
The “holy trinity” of Investing
11 Weapons of Fraud by Anthony Pratkanis & Doug Shadel
Tricks of the Trade: Outsmarting Investment Fraud DVDJoint venture of FINRA, AARP andwww.saveandinvest.org
Crimes of Crimes of PersuasionPersuasion
MM C C II
ildognitivempairment
Made 44 times more mistakes in financial decisions
*Elder Financial Fraud: A National Epidemic DVD by North American Securities Administrators Association (NASAA), Investor Protection Trust (IPT) and Investor Protection Institute
General cognitive functionsVocabularyGeneral knowledgeADLs (bathing, eating, cooking)
Memory, subtle language difficulties, ability to multi-task BUTBUT
NOT NOT demented
Socially isolated
Made poor investments
Changed his/her will
Reduced ability to make decisions
More willing to “gamble” with their money
IndicatorsIndicatorsOfOf
MCIMCI
Cognitive “Reserve”Protection against
age-related brain changes
*Increases Reserve Higher levels of education Exercise Mediterranean-style diet Complex job Bilingual Large social network
*Reduces ReservePrior head injuryDiabetesHigh blood pressureHigh cholesterol
*Coping With Mild Cognitive Impairment - NYTimes.com 11/27/12
For loved ones with MCI
Sign them up for the DO NOT CALL list Get the deal in writing Get copies of anything they sign Check the registration status of the product and the promoter
before investing Request and read CRD Reports before investing Use the Investor Checklist form for new investments Report suspicions of fraud Stay current on fraudulent scams at
http://www.nasaa.org/investor-education/ Use NASAA’s Conversation Starter for Empty Nesters at
http://www.nasaa.org/2965/conversation-starters-seniors/
Top 5 Top 5 Foggy AreasFoggy Areas
For Fraud For Fraud
Fake “senior” designationsFake “senior” designations
#5#5False or Misleading “Certifications” False or Misleading “Certifications”
Included in free Included in free CRD Reports CRD Reports
#4#4Affinity FraudAffinity Fraud
Join a group, using referrals to sell within the group
● Ethnic ● Social ● Religious
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Professional sales presentation Personal appointment later
20
PressurePressure
totoBuyBuy
Fraud victims were 33 times more likely to attend
Free?Free?
#3
Free Meal Investment Seminars
Social Networking
“Friend” or Foe?
“Friend” a community leader Pitch the investment later Leader reports profits to their “friends”
Establish friendly rapport with new contact Fake similar Likes & Dislikes; send friendly messages Pitch the investment later
#2Internet
JOBS Act
Raise up to $1M, sold through broker or “portal”
InvestorsInvestorsVery high potential for fraud
Businesses seeking fundingBusinesses seeking funding - could be swindled by unqualified or illegal “portals”
Allows new & small new & small businesses to raise capital from the “online crowd”
Exempt from SEC Exempt from SEC andand state registration state registration
Rules still to be written by SEC; not legal yet
#2 InternetInternet
#1Ponzi Scheme
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$65 B$65 B
Bernie Madoff, 72, former NASDAQ Commissioner
Swindled victims over 55 continents for decades out of
Sentenced to 150 years 150 years in federal prison
Check up!Check up!
Risky Business
NEVER checked Broker’sregistration with the state
80%80%
70%70%
80%80%
NEVER checked if Broker violated any laws
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NEVER checked into the Broker’s background
Tricks of the Trade: Outsmarting Investment Fraud
2007 FINRA Fraud Risk Survey
“Are you registeredregistered with the state to sell this security?”
1. Ask why not (take notes)
2. Call OFI to check if the reason is legitimate OR OR to register a complaint
1. Ask for the person’s CRD CRD NumberNumber or Legal name
2. Email a request to [email protected]
Individual selling the product
May be Exempt from filing with OFI
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Product (security) being sold
May be Exempt from filing with OFI
What’s Required by Law?
The individual and the product sold are two separate things
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Register with OFI
Notice-of-Sale filed with OFI
Nothing with OFI
Individual
Product (Offering)
What’s “on record” with OFI?
Note: Exemptions to Registration are available
FREEBackground Checks
C.R.D. ReportsC.R.D. Reports
Securities qualifications
Certifications
Pending arbitration
Criminal history
Bankruptcies 29
Employment History, including:
Terminations
Disciplinary Actions
Customer Complaints
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For fastest serviceSubmit the person’s CRD NumberCRD Number or legallegal namename
CCRRDD
your request
On Handout
an’tan’tememberememberetailsetails
31
Check upCheck up Wake upWake up Wise upWise up
