WASHINGTON (September 1, 2005) —In the wake of widespread devastation caused by Hurricane Katrina in Louisiana, Mississippi, Alabama, and Florida, the North American Securities Administrators Association (NASAA) today warned investors to beware of opportunistic investment scams.
“Bottom-feeding con artists always try to find ways to exploit tragic headlines to cash in on unsuspecting investors,” said Franklin L. Widmann, chief of the New Jersey Bureau of Securities and President of NASAA, the oldest international organization devoted to investor protection. NASAA’s membership consists of the securities administrators in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, the provinces and territories of Canada, and Mexico.
“In the aftermath of this week’s tragedies, investors should be patient and cautious when making decisions about their investments or finances,” he said, noting that cold-calling telephone salespeople, advertisements, or Internet postings that tout investment pools or bonds to help hurricane victims, or supposed water-removal or purification technologies and electricity-generating devices should be a red flag for investors.
Widmann also urged investors to watch out for oil-and-gas scams given the current oil prices and the prospects of even higher prices following Katrina’s destructive path through Gulf of Mexico oil fields and refineries.
Recalling that many con artists exploited fears associated with the September 11 terrorist attacks and the Year 2000 computer bug to promote investments in precious metals, emergency preparedness scams and non-existent technology companies, Widmann urged investors to:
- Hang up on aggressive cold callers promoting hurricane-related or oil-and-gas investments, and ignore unsolicited e-mail or Internet messages discussing small companies with new hurricane-related technologies or products;
- Request written information that fully explains the investment.
- Use common sense. Pie-in-the-sky promises often signal investment fraud.
- Contact your state securities regulator to check that both the seller and investment are licensed and registered. If not, they may be operating illegally. To contact your state securities regulator visit www.nasaa.org.
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