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Regulators Are Warning of Investment Schemes

September 20, 2001|From A Times Staff Writer

Securities regulators are warning Americans to be on the lookout for investment scams that may pop up in the aftermath of last week's terrorist attacks.

Investors should beware of cold-calling, or unsolicited, telephone salespeople, advertisements and Internet postings that tout commodities, exotic financial products or supposed anti-terrorist technologies, the North American Securities Administrators Assn. said this week.

"In times of tragedy, confusion, fear and uncertainty, there are always those who will attempt to prey on the investing public," said Joe Borg, NASAA president and director of the Alabama Securities Commission.

"In the wake of last week's tragedies, investors should resist the temptation to make hasty decisions about their investments or finances."

The NASAA didn't cite any specific investment scams that may be making the rounds. However, Borg noted that many con artists exploited fears about the year 2000 computer bug to tout questionable investments in precious metals, emergency-preparedness scams and nonexistent technology companies.

Consumer groups have issued similar warnings in recent days about possible scams associated with raising funds for victims of the Sept. 11 attacks.

"We are seeing door-to-door appeals, spammed e-mail messages, telephone solicitations and organizations that say that their sale of products will somehow help victims or relief efforts," said Bennett Weiner, chief operating officer of the Better Business Bureau's Wise Giving Alliance in Arlington, Va.

"Don't let the emotion of the moment cause you to let your guard down," Weiner said. "There is a great need out there. You don't want your charitable dollars misdirected."

The NASAA had the following tips for investors:

* Resist cold-calling brokers promoting "safe" investments in precious metals or oil, and ignore unsolicited e-mails and Internet chat-room talk about small companies with new anti-terrorist technologies or products.

* If you are considering an investment, request written information about it, such as a prospectus or offering circular.

* Contact state securities regulators to make sure the seller and the product are registered. California securities regulators can be reached at (916) 445-7205. A list of all state regulators can be found on the Web at

* Use common sense. Pie-in-the-sky promises are almost always a sign of investment fraud.

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