Colorado Division of Securities reminds investors to beware of con artists looking to profit from fear and uncertainty
DENVER — In light of the ongoing developments related to the current coronavirus (COVID-19) situation, and its impact on financial markets, the Division of Securities is reminding investors in Colorado to beware of con artists seeking to capitalize on fear and uncertainty.
“We know fraudsters are opportunistic and use current events to cloak their schemes with an air of immediacy and legitimacy. Never make an investment decision without understanding what you are investing in, who you are doing business with, where your money is going, how it will be used, and how you can get it back,” said Acting Securities Commissioner David Cheval. “Always ask if the salesperson and the security are registered with their state or provincial securities regulator.”
Investors should also be on the lookout for scam artists trying to use the market downturn and the coronavirus to scare investors into so-called “safer, guaranteed investments.” If there are concerns about the status of retirement accounts or investments, talk to a financial professional, and avoid making decisions based on panic or fear.
To help investors identify common telltale signs of possible investment fraud, the Division has provided three questions to ask before making any new investment.
- First, is the investment being offered with a guaranteed high return with little or no risk? All investments carry risk that you may potentially lose some or all of your money. Anyone who says their investment offer has no risk is lying. No one can guarantee an investment return.
- Second, is there a sense of urgency or limited availability surrounding the investment? If the offer is legitimate, it will be there later. If someone offers you a “can’t miss” investment opportunity and puts you on the spot, don’t be afraid to walk away.
- Third, is the person offering the investment, and the investment itself, properly licensed or registered? For the same reasons you wouldn’t go to an unlicensed doctor or dentist, you should avoid unregistered investment salespeople and their products.
The bottom line: Make sure you have all the facts before you hand your money over to someone else to invest.
The Division also encourages investors to reach out with any questions about the investment professional they are working with or a product being offered. The agency is available at (303) 894-2320 and online at www.dora.colorado.gov/dos.