Denise Voigt Crawford
Texas Securities Commissioner
President, North American Securities Administrators Association
February 24, 1998
NASAA Investor Education News Conference
Federal Reserve Board
Thank you, Arthur…As state regulators, we’re very pleased to be part of this unprecedented investor education campaign. I’m personally pleased to be here today…as the President of NASAA and as Securities Commissioner of the State of Texas. As you can see…investor education is an issue that unites regulators, consumer advocates and the securities industry.
The first day of this weeklong campaign will feature a National Roundtable on Saving and Investing—what Americans know, don’t know and need to know. Investors need to get the facts, know their rights and watch out for fraud.
There’s an old saying that “knowledge is power”…I believe that when it comes to investing, knowledge is protection. Always remember: it’s your money. Uninformed, unsophisticated investors make tempting targets for crooks.. As state regulators we see this all the time.
We fear the fundamentals could be in place for a long-term bull market in fraud. These fundamentals include record numbers of Americans investing in the equity markets, many with wildly unrealistic expectations; baby boomers worried about having enough money for retirement; and older Americans trying to live on fixed incomes in an era of low interest rates.
Another development that has fundamentally changed everything is the Internet. While the ‘Net is a great tool for investors, it’s increasingly being used…and abused…by evermore sophisticated con artists.
For example, just last week a colleague sent me a junk e-mail that he had received. The headline above the message read, “Double your money by Easter.”
Investor education is a top priority of state regulators. We believe it’s an essential part of what it is we do to protect investors. Today state regulators license investment professionals, examine firms, review securities offerings…and put crooks in jail. While we work hard, there are limits to what we can do.
Investors themselves are the true first line of defense against crooks. Investors need to be well-armed…with knowledge…and a healthy skepticism.
Wall Street is no short cut to Easy Street—success takes persistence, patience and practice. Wall Street can be a mean street for those who aren’t careful with their money.
There are a few simple steps investors can take to protect themselves:
One— Get the facts: always, always check up on your investment professional and their firm by calling your state regulator to see if they’re licensed to sell in your state and what, if any, disciplinary record they’ve got.
Two—hang up on aggressive, cold-callers and never allow yourself to be pressured into making an investment over the phone.
Three–if you have problems, always forward a copy of your complaint to your state regulator.
Investor education is so important… .State regulators are working on a million dollar national program we call “Financial Literacy 2001.” Our goal is to assure that investment fundamentals are taught to every high school senior in the nation.
Think about it…we teach phys-ed, sex-ed and driver’s ed—it’s now time we teach investor ed. The investors of tomorrow must be taught how to manage and protect their money. After all, we need to tell each young adult it’s your future.
I believe you’re never too young to learn about money and investing. Knowledge, skepticism and good investing habits will pay dividends for a lifetime.
February 28, 1998