For years, the media has portrayed senior citizens as the victims of investment fraud. The myth is that seniors are so confused or so easily tricked into fraudulent investment schemes that it only makes sense that they are the ones who are duped. The evidence, however, shows that, while they may be embarrassed to admit that they have fallen victim to an investment scheme, individuals from every demographic have been defrauded.
So, in an effort to curb investment fraud, the federal government has been working through the Justice Department to educate people about investment fraud and how to avoid it. One of these educational events will also make its way to Miami. The Justice Department will pair with Miami police, the AARP, The Better Business Bureau the FBI and the Securities and Exchange Commission to help shed light on this problem. And, it is important that this information gets disseminated now; there has been a 136 percent increase in investment fraud between 2008 and 2011.
As we have mentioned before, it is important for individuals to have trustworthy and reliable investors and stockbrokers. The money that Miami residents invest is, by and large, the money that they will use to cover retirement expenses. If that money is gone because of a Ponzi scheme or some other fraudulent activities, individuals may find that they may need to work much longer than they had originally planned.
One federal attorney believes that the Justice Department is uncovering more and more schemes because of the economic downturn. When people were better off, it was easier for fraudulent investors to collect more money from people. Unfortunately, as money became tighter, individuals who had invested were asking for their money back, causing the scheme to fall apart.
Ultimately, investment fraud is a very real problem in the United States and it requires a multi-prong approach to tackling it; education is only one part.
Source: Reuters, “Feds step up investor fraud education efforts,” Mitch Lipka, Oct. 23, 2012
Stop by our securities fraud and stock broker misconduct page to learn more about this unfortunate practice.
