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You may have lost money in your investment portfolio,
due to mismanagement and not even know it.

Seniors should look out these possible signs of investment fraud

Like many other people here in California, you may be working on supplementing your retirement fund. As part of doing so, you may rely on investments to grow your money faster than it would in, say, a savings account. This means entrusting your hard-earned money to someone you barely know.

This also means that the person you choose needs to be above board and trustworthy. Making that determination could be tricky. Perhaps the following "red flags" could help in making your choice.

These signs could mean investment fraud

When evaluating an investment advisor or broker, the Securities and Exchange Commission recommends looking for the following signs of potential investment fraud:

  • If an individual promises you little risk for a high return, be suspicious. The rule of thumb is that greater returns come with greater risks.
  • Make sure that the person you consider is licensed and registered. Numerous resources can provide you with the information you need.
  • Some unscrupulous people will hold seminars offering a free lunch while they attempt to sell you. If you do decide to attend, be sure that you do not intend to buy anything. It can be easy to get caught up in the fervor of the event.
  • Only someone with an ulterior motive would attempt to pressure you into making a quick purchase. You should have all the time you need in order to make an informed decision.
  • Being in good standing with licensing and registration doesn't necessarily mean there isn't an issue. When researching the background of someone in investments, look for the following possible red flags:
    • Terminations
    • Personal bankruptcies
    • Employment history at expelled securities firms
    • Numerous customer complaints
    • Internal reviews by an employer

If you see any of these signs, you may have dodged the bullet of a dishonest investment broker or advisor.

If you missed the signs

First, don't let embarrassment keep you from understanding your rights and exploring your legal options. You may not feel comfortable admitting that someone fooled you, but that person breached your trust, and he or she may do it again. In addition, it may be possible to get your money back.

It may be a good idea to seek out the advice and assistance of an attorney who understands your issues and the securities industry. After a review of the situation, he or she can help you determine your next step.

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