Are Self-Directed IRAs Safe for Ohio Investors?

Recently, the Securities and Exchange Commission issued an Investor Alert about self-directed IRAs. While self-directed IRAs are legal, there have been an increasing number of complaints associated with these investment instruments in recent years. If you currently have a self-directed IRA, or you are considering a self-directed IRA, then it is important to know the potential risks and what to do if you are the victim of a self-directed IRA scam.

Why Self-Directed IRAs May be Vehicles for Fraud

Some self-directed IRAs may be suitable and safe investments. However, our Columbus investment fraud attorneys want you to know that the SEC warns investors that:

• Custodians and trustees of self-directed IRAs claim to have limited duties to investors and often do not evaluate whether a self-directed IRA is a suitable investment for a particular investor. Fraudsters may overstate the role of custodians and trustees in order to give investors a false sense of security.
• People who perpetrate Ponzi schemes may do so through self-directed IRAS because self-directed IRAs, unlike other IRAs, allow investors to hold unregistered securities, and the custodians of self-directed IRAs typically do not investigate each investment carefully. The unregistered securities and other alternative investments may also be hard for an investor to research on his or her own.
• Self-directed IRAs, like other retirement accounts, impose a financial penalty on investors who take out money before retirement age. That may lead investors to keep their money in a self-directed IRA even if fraud is suspected.

When to Contact a Columbus Investment Fraud Attorney for Help

If you have lost money in a self-directed IRA due to fraud or wrongdoing, then you may have the right to recover damages. It is important to contact an experienced Columbus investment fraud lawyer as soon as you suspect fraud.

To learn more about investment fraud and what to do if you’ve been victimized, please read our FREE book: Five Signs of Investment Fraud... And What to Do if it's Happened to You. Give us a call at 614-224-6000 (or toll-free at 1-866-827-6537) to schedule a free consultation with an experienced Ohio investment fraud attorney.