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SEC Launching Campaign to Educate Investors : Markets: Program is designed to help individual investors navigate the myriad of financial options now available to them.

October 03, 1994|KATHY M. KRISTOF | TIMES STAFF WRITER

Securities and Exchange Commission Chairman Arthur Levitt Jr. today will launch several new initiatives in a consumer education campaign designed to help individual investors negotiate the financial markets.

Citing a huge influx of cash and new investors into mutual funds, Levitt says the need to educate and protect investors has never been greater.

Individual investors will soon have more money in the stock market than in bank deposits, Levitt notes. Already, one out of every four American households has money in mutual funds compared with just one in 16 households in 1980.

"Access to information--especially through the use of today's technology--is key to making our markets fair for all," he says.

The first step in the agency's campaign will be to join the Internet and use it to post announcements about SEC activities on an electronic bulletin board accessible through the Department of Commerce's FedWorld system.

This will give investors who have personal computers and modems the ability to get up-to-date information about proposed SEC rules, notices about completed enforcement actions against brokers and brokerages, as well as general investing tips. The SEC will also post speeches given by agency officials.

The agency will also release a new investor booklet today that advises individuals on ways to select a fund; how to read a mutual fund prospectus, and how to evaluate costs and risks. It is the second booklet put out by the SEC this year. The agency's other offering, released in March, gave more generic investing tips, explaining how brokers are paid and questions you should ask when opening an investment account.

The final step in the campaign--a toll-free number--will start in October. Individuals will be able to call for booklets on investing and information about the financial markets. Levitt will conduct public forums to meet and chat with individuals about their investing concerns. The forums will be held in Los Angeles; Cherry Hill, N.J.; Albuquerque, N.M.; Chicago; Boston; Hollywood, Fla., and Washington, D.C.

These moves are the latest in a series of programs designed to make the SEC more responsive to consumers, Levitt says. Earlier this year, the SEC created a new Consumer Affairs Advisory Committee--the first of its kind--that regularly consults with SEC commissioners on issues of importance to individual investors. Committee members include Daniel P. Amos of Aflac Inc., Peter Lynch of Fidelity Management & Research Co. and Helen Boosalis of the American Assn. of Retired Persons.

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