And other steps for keeping your money safe from investment scams.

1) Before even hearing about an investment opportunity it’s important first to learn about the person who will be handling the transatcion. You can research your broker on FINRA’s BrokerCheck website and you can research your investment adviser at the Investment Asviser Public Disclosure website. If you don’t know who to call, try the SEC’s investor hotline at 800-732-0330.

2) Important rule to know: all securities must be either registered with the SEC or exempt from being registered with the SEC. If the SEC has no record of a security, that’s a red flag for a scam. Look at the EDGAR database or call the investor assistance hotline to make sure the investment is registered.

3) Find out about the risks compare to the rewards. The potential for great returns comes with greater risk. That means you’re exposed to large potential loses. Even safe investments come with some degree of risk. Ignore anyone who tries to sell you a high-return, low-risk deal. They’re taking your money.  

Many investment frauds are pitched as high return opportunities with little or no risk. Ignore these so-called opportunities or, better yet, report them to the SEC.