– Following the Federal Reserve’s
announcement that interest rates are expected
to remain low until at least late 2014, the
New Jersey Bureau of Securities today cautioned
investors to beware of risky or outright fraudulent
investments promising higher yield or returns.
evaluating any investment, it pays to remember
that risk and reward go together. Anyone
promising high yield or high returns with
little or no risk should be approached with
a high degree of skepticism,” Attorney
General Jeffrey S. Chiesa said. “Our
investigators in the Bureau of Securities
will remain vigilant against investment
fraud, but consumers need to perform their
own due diligence when deciding how to invest
interest rates or high rates of return should
be viewed with caution, especially when
the promised rates far exceed what other
investments are offering,” said Thomas
R. Calcagni, Director of the State Division
of Consumer Affairs. “Con artists
are using the lure of high rates to entice
investors and defraud them of their hard-earned
running away from low yields on fixed investment
products risk stumbling into the arms of
unscrupulous salespeople promising low risk
and high returns,” said Bureau Chief
Abbe R. Tiger. “Don’t chase
the offer of high yield or returns into
a dead-end investment.”
Tiger said the Bureau of Securities is concerned
that individuals who depend on fixed income
investments, particularly seniors, may be
tempted to turn away from their slower growing
but safe investments to alternative investments
without understanding the risks and terms.
investments carry a degree of risk. The
level of risk usually is related to the
return that investors can expect to receive.
Investments with higher yields or returns
carry a higher risk to investors; the lower
the risk, the lower the yield or return.
Tiger noted that yield-starved investors
may be more easily enticed into fraudulent
schemes that can be cloaked as private placement
offerings, promissory notes, securitized
life settlement contracts and investments
in energy, precious metals and distressed
real estate, all of which are contained
in the Bureau’s current list of Top
Before purchasing any investment, the Bureau
of Securities reminds investors to ask the
Are claims made for the investment
realistic? Use common sense and
get a professional, third-party opinion
when presented with investment opportunities
that seem to offer unusually high returns
in comparison to other investment options.
Has the seller given you written
information that fully explains the investment?
Request written information that fully
explains the investment, such as a prospectus
or offering circular. The documentation
should contain enough clear and accurate
information to allow you or your investment
adviser to evaluate and verify the particulars
of the investment.
Are the seller and investment
licensed and registered in New Jersey?
The NJ Bureau of Securities can tell you
if they are. If they are not, they may
be operating illegally.
more information, contact the Bureau of
Securities at 973-504-3600
or via email at askBureauOfSecurities@dca.lps.state.nj.us.