Investigate Before You Invest, Official Warns

If something is too good to be true, then most of the time it is, Arkansas Securities Commission senior examiner Larry Cathey said Monday.

Cathey spoke to about 50 people at the Arkansans Fighting Fraud event at St. Bernards Auditorium in Jonesboro.

The Arkansas Attorney General’s office, along with the state’s Insurance Department, Department of Human Services, University of Arkansas Division of Agriculture, Research and Extension and the AARP, sponsored the event to talk to residents about investment fraud, as well as other issues.

Cathey said a 2013 study from the Securities Investor Protection Corp. showed that investment fraud had a $10-$40 billion cost to the nation’s economy.

“Investment fraud, it is truly as old as recorded history,” Cathey said. “But today, the cost is bigger.”

Cathey said most people who are defrauded, in particular senior citizens, feel ashamed and often do not report fraud cases to the authorities.

Cathey said it is often difficult to catch people suspected of fraud because there is not a single source to catalog complaints and rules between federal and state agencies are often blurred.

TIPS
Cathey said people who are willing to invest in a company or a financial fund should do their homework first before investing.

He suggests people watch out for unlicensed groups, as well as people who make guarantees on a rate of return. Also, a person should ask for a prospectus or an offer sheet and should avoid pushy or overly aggressive sales people, Cathey said.

Attorney General Dustin McDaniel said his office attempts to hold events around the state to educate people on the issues.

“It is about getting good information to the citizenry, to help them ward off scams and protect yourself from fraud,” McDaniel said.

A recent data breach by Target and several national restaurant chains have made people more aware of problems, McDaniel said.

“I would suggest that people keep up with their credit report and their credit card statements,” McDaniel said.