SmartInMoney

For investors spooked by financial scams and scandals, the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) offer tools to monitor stockbrokers and identify and avoid fraud. They are helpful for investors who are afraid of getting into investing because of recent scandals and the economic meltdown. Continue reading

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How to avoid scam by investment manager

 

 

In the wake of Madoff hedge fund scam, the SEC will reassure the market that the commission’s enforcers will do a better job next time. But investors would be better off helping themselves.

While most investment managers are honest, your investment manager could be another Bernard Madoff who masterminds the biggest Ponzi scheme in history. To prevent you from investment scam ran by your investment manager or financial planner, the following are some advices for picking the investment professional. Continue reading

 

 

There were some lessons that investors should learn from the Madoff scandal, who was allegedly masterminded a giant Ponzi scheme.

Many people and institutions tied up almost all of their assets with Madoff. While it's tempting to keep an asset that seems to be doing so well, it's important to diversify and regularly rebalance an investment portfolio. After all, it doesn't take a fraud to expose the failure of concentrating too many assets in one place. A significant market correction can have the same damaging effect. Continue reading

 

 

For years doubters on Wall Street said the returns of Bernard Madoff’s hedge fund were too good, too steady and his operation always looked too slim for the tens of billions of dollars it was managing. However, given Madoff’s experience and past service the wealthy kept giving him their money. Now it looks like those concerns were right all along now as the Bernard Madoff scandal was unmasked. Continue reading

 

Ponzi schemes, also known as pyramid schemes, work essentially by bringing in new investors to pay off old ones. In its pure form, there’s never any actual business activity; instead, the money just rolls backward from ever-increasing numbers of investors to keep up the appearance of profits. Continue reading