COLUMBIA — Secretary of State Robin Carnahan is making an effort to throw the book at fraudsters — especially those making off-book sales.
Carnahan’s Securities Division has recovered $10 billion in savings in the last few years. That money has been given back to thousands of Missouri-based investors. The Securities Division protects investors from fraud and ensures that all securities are sold legally.
"If markets go up and down, that's a risk we have to take, but breaking the law isn't something we have to take," Carnahan said.
“Off-books sales are the number one top threat to Missouri investors right now,” she said.
Off-books investments occur when a financial adviser offers special investments to clients that are not sold through a firm or do not meet Securities and Exchange Commission requirements. These types of sales are illegal in all cases.
Bernie Madoff’s Ponzi scheme is an example of an off-books investment fraud. Madoff's scheme was the most expensive fraud in history.
A few key facts about investment fraud in Missouri:
- Senior citizens, especially those on fixed incomes, are the most targeted group for investment schemes, Carnahan said. Boone County Agency on Aging is a good starting place for senior citizens with questions about transferring wealth.
- Carnahan said the higher number of investment frauds is a reflection of uncertain economic times. The Investment Fraud hot line saw a 40 percent increase in calls in 2009.
- Fraudsters can be personal acquaintances or friends. “These fraudsters are very sophisticated in gaining these people’s trust and getting control of their money,” Carnahan said.
Warning signs and ways to protect investments:
- Reporting suspicious activity is the best way to stop investment fraud. If an investment opportunity seems suspicious or too good to be true, call 800-721-7996 or visit the Investor Protection hot line.
- The Secretary of State Office has tools to research an adviser. Check out an adviser to find out what they’re selling and verify that they have a clean record in Missouri.
- Get everything in paperwork. Make sure it includes all fees, costs and charges.
Carnahan is visiting several other cities in Missouri to promote awareness for investment fraud. For other tips and warnings for investors, see the official Web site for the Missouri Secretary of State.