Arkansas Securities Department announces top 5 investor threats

The Arkansas Securities Department (ASD) announced guidance for investors, including a top five list of investor threats.

The ASD encourages caution when purchasing volatile unregulated investments, especially cryptocurrency and digital assets.

“Cryptocurrencies have developed into more than a trillion-dollar financial market with a wide variety of uses and functionalities,” said ASD Commissioner Eric Munson. “The Securities Department discovered that investments related to cryptocurrencies and digital assets is our top investor threat. Prospective investors are encouraged to proceed with caution, do their research, evaluate their financial goals, talk to a financial professional and call the Department for information on the company offering the investment.”

The top 2022 threats were determined by a survey of securities regulators conducted by the North American Securities Administrators Association (NASAA). The annual survey is designed to identify the most problematic products, practices or schemes facing investors.

The following is a list of the top 5 investor threats to watch out for in 2022:

• Investments tied to cryptocurrencies and digital assets;
• Fraud offerings related to promissory notes;
• Money scams offered through social media and internet investment offers;
• Investment advice tied to precious metals-based investments; and
• Financial schemes connected to Self-Directed Individual Retirement Accounts.

“Many of the fraud threats facing investors today involve private offerings, as federal law exempts these securities from registration requirements and preempts states from enforcing important investor protection laws,” Munson added. “Unregistered private offerings generally are high-risk investments and don’t have the same investor protection requirements as those sold through public markets.”

The ASD cautions citizen investors of all ages and experiences to thoroughly scrutinize and research any investment opportunity or offer. Contact the ASD at 1-800-981-4429 or www.securities.arkansas.gov to check out any person or financial professional offering an investment opportunity or investment advice for a fee and the products they offer for proper registration.