Tuesday, January 18, 2011

Alabama Securities Commission

It was a pleasure to listen to Joseph P. Borg, Director of the Alabama Securities Commission (ASC), speak at a luncheon meeting earlier today. Various investment fraud examples were discussed as well as a need for general investor educational resources. The current economic environment is almost a perfect storm for fraudsters. You have very low yields on traditional investments so investors are looking to earn a higher yield on their liquid cash. The volatile markets of real estate, rising oil prices, and rising gold prices have also created opportunities for investment fraud in these areas. This does not mean that investments in these areas are a bad choice, just that scammers use the headlines to sell legitimacy and to gain trust.

Investments that offer very high yields should always be reviewed and researched very closely. How many times have we heard "if it sounds too good to be true, it probably is". One of the fraud examples given during the presentation offered investors a doubling of their investment within 18 months. This simply is not realistic and sure enough the investors lost all of their investment dollars. Do not allow the lure of a high yield prospect to cloud good financial judgement.

The ASC website has valuable resources, investor alerts, and links to help educate investors in making a sound financial investment. Here is their website - http://www.asc.state.al.us/index.htm . Check it out!

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