There are some excellent things that investors can do for stock fraud prevention and to help clean up Wall Street.
Investor Fraud Prevention Tips
- Look up the background of your stockbroker on the FINRA BrokerCheck System: The Financial Industry Regulatory Authority (FINRA) offers an extremely valuable service for looking up the background of your stockbroker and brokerage firm to see if they have ever been guilty of harming other investors. If FINRA BrokerCheck shows that your stockbroker or brokerage firm has a history of committing stock fraud, you should ask your broker for an explanation and consider switching to a more reputable investment advisor or switching brokerage firms altogether. You worked your whole life to save and earn your money. It pays to be diligent in this regard.
- Talk to your friends about investment topics and find out what their experiences have been: Talking about finances is often a social taboo, and most victims of investment fraud are mortified to tell their friends about it, either out of embarrassment that their financial well-being has been destroyed, or out of embarrassment that they were lied to and “played for a fool.” But it’s important for investors to communicate with each other and warn each other about potential dangers that other investors may unknowingly encounter. This is the most grassroots form of investment fraud prevention, and quite possibly the most valuable, but consumers have to start talking to each other in order for it to work.
- Read, Read, Read: Granted, many of us live extremely busy lives working hard and saving our money for our future golden years or for our children’s education, but if you have a significant amount of money that you’re investing, it’s very important that you understand the risks and investments inside your account. Stockbrokers may not tell you the whole truth about your investments, and if you’ve been lied to, you want to find out before it’s too late. Read and review all of your monthly statements as soon as you get them. If there’s an investment inside your account that you don’t fully understand, look it up on the internet and learn about it. Reading and staying up to date with investment news will also help you to avoid any widely known problems with the economy or fraudulent investments that could affect your finances. When it comes to investing, knowledge always pays the biggest dividends.
- Write to your congressional representatives: If you have been the victim of stock fraud and you have lost money as a result, it’s extremely likely that other people (if not millions of people) have been the victims of the exact same fraudulent scheme. It’s important that we tell our senators and congresspersons about such fraud when it occurs. They’re the ones who make the laws, and they’re the ones who can make appropriate changes to the system in order to prevent such fraud from hurting other people in the future. If you don’t know who your representative is, you can find out by entering your zip code here. It only takes a few minutes to write your representative, but if everyone did it, big changes could happen quickly.