By Nancy Boudreaux Investor Education Trainer Louisiana O ffice of F inancial I nstitutions Guard Rails Protecting Your Community From Investment Fraud 3 A system designed to keep ID: 417836
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Slide1
Presented by
By Nancy BoudreauxInvestor Education TrainerLouisiana Office of Financial Institutions
Guard Rails
Protecting Your Community
From
Investment FraudSlide2
3
A system designed to keep vehicles from straying into dangerous areas
An Action Plan designed to
keep
investors
from straying
into dangerous areasSlide3
Why listen?Slide4
NASAA
FINRA IPT FBI CFPB
AARP
Investor Education
“Main Street” InvestorsSlide5
State Securities Regulator
Regulation
Investigation
Investment ProfessionalSlide6
Wake up!Slide7
55+Slide8Slide9
Wise up!Slide10
High profit
10Low riskLiquid
The “holy trinity” of InvestingSlide11
11
Hopes & Fears
Weapons of Fraud
by Anthony
Pratkanis
& Doug
Shadel
Tricks of the Trade: Outsmarting Investment Fraud
DVD
Joint venture of FINRA, AARP and
www.saveandinvest.org
Crimes of
PersuasionSlide12
M C
Iild
o
gnitive
mpairment
Made
4
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 InstituteSlide13
General cognitive functionsVocabularyG
eneral knowledgeADLs (bathing, eating, cooking)Memory, subtle language difficulties, ability to multi-task
BUT
NOT
dementedSlide14
Socially isolatedMade poor investments
Changed his/her willReduced ability to make decisionsMore willing to “gamble” with their money
Indicators
Of
MCISlide15
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 Reserve
Prior head injury
Diabetes
High blood pressure
High cholesterol
*
Coping With Mild Cognitive Impairment -
NYTimes.com 11/27/12Slide16
For loved ones with MCI
Sign them up for the DO NOT CALL listGet the deal in writingGet copies of anything they signCheck the registration status of the product and the promoter before investingRequest and read CRD Reports before investingUse the Investor Checklist form for new investmentsReport suspicions of fraudStay 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
/
Slide17
Top 5
Foggy AreasFor Fraud Slide18
Fake “senior”
designations#5False or Misleading “Certifications”
Included in free
CRD Reports Slide19
#4
Affinity FraudJoin a group, using referrals to sell within the group
●
Ethnic
● Social
●
Religious
19Slide20
Professional sales presentation P
ersonal appointment later20Pressure
t
o
Buy
Fraud victims
were
3
times more likely to attend
Free?
#3
Free Meal Investment SeminarsSlide21
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
#2
InternetSlide22
JOBS Act
Raise up to $1M, sold through broker or “portal”
Investors
Very
high potential for fraud
Businesses seeking funding
- could be swindled by unqualified or illegal “portals”
Allows
new & small
businesses
to raise capital from the “online crowd”
Exempt from SEC
and
state registration
Rules still to be written by SEC; not legal yet
#2
InternetSlide23
#1Ponzi Scheme
23$65 B
Bernie Madoff
,
72, former
NASDAQ
Commissioner
S
windled
victims
over
5
continents for decades
out
of
Sentenced to
150 years
in federal prisonSlide24
Check up!Slide25
Risky
BusinessNEVER checked Broker’sregistration with the state80%
7
0
%
80%
NEVER
checked
if Broker
violated
any
laws
25
NEVER
checked into the Broker’s
background
Tricks
of the Trade: Outsmarting Investment
Fraud
2007
FINRA Fraud
Risk SurveySlide26
“Are you registered
with the state to sell this security?” Ask why not (take notes)Call OFI to check if the reason is legitimate OR to register a complaint
Ask for the person’s
CRD Number
or
Legal
name
Email a request to
complaints@ofi.la.gov
NO
YESSlide27
Individual selling the productMay be
Exempt from filing with OFI27Product (security) being soldMay be Exempt
from filing with OFI
What’s Required by Law?
The
individual
and the
product sold
are two separate thingsSlide28
28
OR
OR
Register
with OFI
Notice-of-Sale
filed with OFI
No
thing
with OFI
Individual
Product
(Offering)
What’s “on record” with OFI?
Note: Exemptions to Registration are availableSlide29
FREEBackground Checks
C.R.D. ReportsSecurities qualificationsCertificationsPending arbitrationCriminal historyBankruptcies
29
Employment History, including:
Terminations
Disciplinary
Actions
Customer
ComplaintsSlide30
30For
fastest serviceSubmit the person’s CRD Number or legal name
C
R
D
your request
On Handout
an’t
emember
etailsSlide31
31
Check up
Wake up
Wise up