Avoiding Securities Fraud

For those just starting out in the world of securities investment, be wary of things that don’t seem quite right. It may be a scam.

First time investors are often not too sure just what securities are and how to invest wisely. In a nutshell, securities are investments that are regulated by the government and include mutual funds, bonds, stocks and government securities. Anytime a person invests money, they want to avoid scams that will take them for all they’ve got.

Some handy tips for the first time investor would make that initial toe in the water a little easier to handle. “The hardest part about investing is the person doesn’t get to see or hold what they’re writing a check for in the first place. It’s not like buying real estate. In cases where you don’t get to see what you’re paying for, do due diligence and check the whole thing over until you are sick of hearing about it, but sure you have a legitimate investment opportunity,” said Seth Wilburn, of the The Gomez Firm, a Dallas employment lawyer and Dallas business lawyer.

If someone is using hard sell tactics to push an investment opportunity and suggesting there will be high returns and very little risk, run in the opposite direction if the pressure is to buy immediately. This is one of the red flags investors may use to decide if they are comfortable with buying something. “Whatever you do, don’t buy any financial investment from anyone not licensed with the National Association of Securities Dealers,” added Wilburn. “The investments those individuals are hawking are not registered, they usually don’t have a license and they’re insisting no one else will get the same chance as you will to invest in this deal of a lifetime,” he emphasized.

There are definitely some very complicated and complex securities that may be bought, such as inverse and leveraged ETFs, stock options and futures contracts. The first time investor is best advised to steer clear of the complexities of these kinds of securities and stick with listed bonds and stocks that are traded publically on stock exchanges, or they could opt to go with money market or government securities. These are safe and relatively easy to understand and definitely on the up and up.

Of all the choices out there on the market, the safest are mutual funds because they are heavily regulated and anyone selling them requires a license. So for first time investors, go slowly, carefully and invest wisely in securities you know are secure investments. Leave the high flying, questionable and shaky deals alone and keep your money,” advised Seth Wilburn, of the The Gomez Firm, a Dallas employment lawyer and Dallas business lawyer.

The Gomez Firm is a Dallas employment lawyer and Dallas business lawyer. To learn more, visit http://www.gomezlawyers.com.