Recovering Losses caused by Investment Misconduct

Ohio Division of Securities Announces Year's Five Top Investment Schemes

At a press conference this morning, the Ohio Department of Commerce announced this year's top investment scams. The top five "list contains the financial products and practices that con artists are using to entice investors in the midst of volatile stock markets and a challenging economy," wrote the Department in today's news release.

For the fifth year in a row, Ponzi schemes topped the list as the most common investment scheme in Ohio, followed by schemes involving unlicensed and unregistered sales (#2), affinity fraud (#3), promissory note schemes (#4), and distressed real estate schemes (#5).

The state's number two scam has been consistently increasing, according to the Department, and is often offered by unlicensed insurance agents. To protect themselves from investment fraud, the Department advises Ohioans to "insist" a person produces a "proper license" if they "recommend or suggest any transaction related to an investor's stocks, bonds, mutual funds or other securities holdings."

Above all, Ohioans should take the time to determine whether an investment is right for them and to check the individual's license and the registration status of the individual through the Division of Securities (call 1-877-NVEST411 (1-877-683-7841) or visit www.com.ohio.gov/secu/).

"Do not feel pressured to make a quick decision," said David Goodman, Director of the Ohio Department of Commerce. "Read the prospectus or offering circular in full and ask questions with a healthy dose of skepticism until you fully understand the investment."

Affinity fraud, listed as the third most prevalent type of investment fraud this year, is a particularly nefarious scheme because it banks on the truism that people are less critical toward those they know and trust. At the press conference, Ohio Securities Commissioner Andrea Seidt warned Ohioans to watch out for the potential con artists in their lives:

"Investment scams are often crimes of trust, perpetrated by people we least suspect to cause us harm like family members, neighbors, longtime friends and those with whom we worship," she said. "Sadly, con artists exploit these personal relationships. Investors should fully investigate every investment opportunity no matter how well they think they know the promoter. If given the chance, a con artist will quickly betray your loyalty and take you for everything you've got."

The Department hopes that knowing which schemes are most prevalent will help Ohioans protect their hard-earned money.

"Con artists prey on peoples' fears by exploiting today's headlines with promises of ‘guaranteed' returns at no risk. Don't be fearful. Be knowledgeable. There is no such thing as a no risk/high return investment," said Goodman.

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