The Securities and Exchange Commission has filed charges against a man accused of luring investors into a fraudulent investment scheme by promising big returns under a provision of the 2012 Jumpstart Our Business Startups Act (the “JOBS Act”). We believe that investment opportunities brought about by the JOBS Act will lead to an increase in investment fraud.

Daniel Peterson and his company, USA Real Estate Fund 1 of Spokane Valley, Washington, allegedly told investors that the JOBS Act would let him raise billions of dollars as a result of the JOBS Act’s looser general advertising restrictions. But Peterson did not really have a guaranteed investment product and he was not affiliated with a financial firm. According to the SEC, Peterson took investors’ money and used it to for personal expenditures, including to pay for rent, food, entertainment, vacations, a rented Mercedes Benz SUV, and expenses at a Las Vegas casino.

Investors should take this story as but one of the many examples that they need to be careful when investing their money. Before you entrust your savings to so-called investment professionals, take the time to research their credentials. A lot of aggravation, stress, and, of course, investment losses generally can be avoided by doing a little homework before you invest.

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