"How arent people protected from this kinda fraud? "
They seldom are. I was caught up in a pink scam. The perps pled guilty to securities fraud over a year ago. The DOJ has set 4 sentencing dates. Each date has been re-scheduled for a later date at the request of THE COURT.
In the meantime the 3 perps are on the street, spending the money that was supposed to go to the scammed as partial restitution. The system is against the retail investor.