TEXAS SECURITIES REGULATOR IDENTIFIES TOP 10 INVESTOR THREATS
AUSTIN, Texas – The State Securities Board today released a list of the most common types of fraudulent investment schemes and offered strategies to avoid becoming a victim.
Emerging red flags on this year’s list include digital currency transactions, stream-of-income investments, and new ways in which unregistered securities are being offered to the public.
Others have been persistent problems for years and show no sign of abating: Phantom oil and gas projects or those that dupe investors with exaggerated claims about the expected output and profits; promoters selling “guaranteed, no-risk” promissory notes which promise to pay inconceivably high rates of returns; and investment contracts in real estate loan programs or projects that fail to generate sufficient revenue from the rehabilitation and sale of distressed property.
The State Securities Board and the Enforcement Section of the North American Securities Administrators Association compiled the list. Additional material comes from the State Securities Board’s Texas Investor Guide: Strategies for Investing Wisely and Avoiding Fraud.
Unregistered Individuals are a three-story tall red flag for investors. Generally, anyone acting as a sales agent for a company selling stock, bonds, or other investments to the public must be registered to do so – a fact many investors don’t realize. A promoter also can’t simply set up a website or YouTube channel and sell investments without the investments themselves being registered or qualified to be sold under very limited exemptions from the registration.
Registering with the State Securities Board involves testing requirements, background checks, and periodic review. To see if a person is registered to sell investments, visit the Agency’s website or call 1-888-663-0009. A sales agent who isn’t registered is likely violating the law. Almost all criminal actions undertaken by the State Securities Board involve unregistered persons.
