Friday, August 04, 2006

SEC Sends a Message to Insurer - It's Not Nice to Trick the Military

Taking advantage of our military in time of war is despicable. Here is some positive news that the SEC (Security and Exchange Commission) is protecting those who protect us.

From the SEC press release:

"Washington, D.C., Aug. 3, 2006 — The Securities and Exchange Commission today sued a Waco, Texas, insurance company and its affiliates for targeting American military personnel with a deceptive sales program that misleadingly suggested that investing in the company’s product would make one a millionaire. Since 2000, approximately 57,000 members of the United States military services purchased the product. The vast majority earned little or nothing on their investment."

The good news is that money from the law suit will go to the service members victimized by the misdeeds of this insurance company.

Press release, here.

There are a lot of "get rich quick schemes" popping up in "in-boxes." In many instances, this means someone getting "rich" at the expense of someone falling for their pitch.

Here are some great tips from the SEC on how to avoid securities fraud:

Be wary of promises of quick profits, offers to share "inside" information, and pressure to invest before you have an opportunity to investigate.

Be careful of promoters who use "aliases." Pseudonyms are common on-line, and some salespeople will to try to hide their true identity. Look for other promotions by the same person.

Words like "guarantee," "high return," "limited offer," or "as safe as a C.D." may be a red flag.

No financial investment is "risk free" and a high rate of return means greater risk.

Watch out for offshore scams and investment opportunities in other countries. When you send your money abroad, and something goes wrong, it's more difficult to find out what happened and to locate your money.

If a company is not registered or has not filed a "Form D" with the SEC, visit the website of the North American Securities Administrators Association to find your state securities regulator.

The SEC also has an excellent web page to help you investigate before you invest:

How to Avoid Investment Scams

Being an informed consumer is imperative in the Internet age. There is a lot of information on government sites that help the common person do this.

You can report suspected "suspicious activity" to the SEC, here.

All too often - when we spot a scam - we move on without thinking "someone might actually fall for this." If everyone reported what they suspect is a scam, we would see a lot less of it going on.

Of course, education is a powerful tool, also.

And if it seems to good to be true, is probably is NOT!

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