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The SEC’s 10 Tips for Safe Investing in 2017

February 6, 2017 Blog

It’s a new year, but individual investors continue to face many of the same risks when it comes to broker fraud, unsuitable investment advice and fraudulent investment scams. If you are planning to invest in 2017, the Securities and Exchange Commission (SEC) has 10 tips for, “mak[ing] better informed investment decisions and avoid[ing] common scams” to protect your hard-earned savings:

1. Do Background Checks

“Always check the background of an investment professional—it is easy and free.” You can find out if an investment advisor is registered or has a history of complains with FINRA BrokerCheck, and you can research potential brokers on

2. Don’t Believe the Hype

There is no such thing as a guaranteed investment, and “[p]romises of high returns with little or no risk are classic warning signs of fraud.”

3. Be Wary of Social Media

In today’s world, many scam artists rely on technology to target potential victims. While email scams remain popular, fraud schemes are increasingly relying on social media. As noted by the SEC, social media “present[s] opportunities for fraudsters to lure investors into a wide range of scams.”

4. Know Your Fees

Investment fees are not uniform, and your account statement may not reflect all of the fees that your broker charges. Make sure you have a clear understanding of all of the fees that will eat into your investment portfolio, as “even small differences in costs can mean large differences in earnings over time.”

5. Know if You are a Target

Affinity fraud – fraud schemes that target particular groups of similarly-situated individuals (such as the elderly, inexperienced investors, religious groups and ethnic minorities) – relies heavily on misplaced trust. “Even if you know the person making the investment offer, be sure to check out the investment and the person’s background.”

6. Find Out if the Investment is Registered

Most investments offered to the public must be registered, and those that are not must qualify for a specific exception with the SEC. “Always check whether an offering is registered with the SEC by using the SEC’s EDGAR database.”

7. Avoid Overconcentration

Choosing one or a limited number of investments can greatly increase your chances of suffering catastrophic losses. Most inexperienced investors should diversify in order to reduce their exposure to fraud scams and “reduce the fluctuations of . . . investment returns without sacrificing too much in potential gains.”

8. Review Your Account Statements

Account churning, frequent and unauthorized trading, and other improper practices can all earn fees and commissions for brokers while cutting into investors’ returns. Review your account statements regularly, and be prepared to seek legal help if you identify potential warning signs of fraud.

9. Have a Plan

It is always a good idea to know why you are investing. The SEC provides savings goal calculators that are designed to “help inform any decisions you make about your investing and saving.”

10. Seek Unbiased Advice

Investors should never rely solely on the information provided to them by potential brokers and investment advisors. “[U]nbiased information can be a significant advantage for investing wisely,” and you can find trustworthy information from a variety of sources, including

Are You Concerned about Investment Fraud? Speak with a Lawyer at Zamansky LLC

If you have invested with a broker or investment advisor and are concerned about investment fraud, contact Zamansky LLC for a free, no-obligation consultation. To speak with an experienced investment fraud attorney in confidence, call (212) 742-1414 or tell us about your situation online today.

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