How to Avoid Investment Fraud

Find out if the investment you are considering is registered with the Securities and Exchange Commission or SEC. Securities are usually required to be registered with the SEC, with some exceptions. Researching an investment’s registration status is possible through the EDGAR Database on the SEC’s website. While registration with the SEC does not guarantee that an investment is immune from fraud, a lack of registration can be a red flag if other potential issues exist regarding the investment.

If you are considering an investment and do not entirely understand how it works or the paperwork you are being asked to sign, an attorney experienced with securities matters should be able to offer counsel. It is better to be safe than sorry, and consulting professional guidance may help you avoid a devastating loss.