Tuesday, October 5, 2010

Fraud By Brokerage Firms on the Rise

Via Investor's Watchblog.
Among the questions I get most often from reporters covering tips on protecting investors from investment fraud is: ” If the investor stays with a recognizable name, aren’t they safe?”  My answer is always the same:  ”Absolutely not.”  The interviewer is usually surprised.  The thought that Morgan Stanley, or Merrill Lynch, or A.G. Edwards would steal from a client does not seem to compute.  And yet, it’s the way things are.  Investors are no safer with a big-name brokerage firm than with any other.
Doing business with a big name brokerage firm can actually put an investor at greater risk of fraud to the extent the investor believes that a big name firm would never take advantage of its customers.  With his or her defenses lowered, and his or her antenna down, the investor becomes a sitting duck for brokerage firm misconduct.
Click Here to Read: Fraud By Brokerage Firms on the Rise

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