Commissioner teaches how to smell a rat
POLSON — The Commission of Securities and Insurance wants to teach you how to smell a rat.
Following two days of making stops all over Western Montana, Commissioner of Securities and Insurance Monica Lindeen brought to Polson her presentation on how to avoid fraud.
The compelling stories told and information given in the video, “Gold Diggers: Investment Fraud in the Treasure State,” comes too late for some investors, however. Several attendees asked how they might have avoided the fraud Cornerstone Financial visited on some locals. It was one of the largest cases of fraud perpetrated in Montana. Approximately $10 million was taken from investors.
There are many things investors can do to protect themselves.
First, do your homework. Don’t invest blindly, completely trusting in the knowledge and integrity of another person or institution. Never make a check out directly to a financial advisor but rather to the firm, and never sign a blank document.
Next, keep track of your investment and know what’s going on and understand the financial risks involved. Get copies of all documents you sign and never sign a blank document. Don’t throw an unopened statement in the corner thinking you’ll get around to it later but rather open all statements and read them. If there are things you don’t understand, call and have them explained to you. If you aren’t satisfied, you can always ask to speak with someone’s supervisor. Investigate if something doesn’t seem right. Seek the advise of a trusted friend who can put another set of eyes on your paperwork. Revisit your investment objectives every three to five years because generally as you get older, you have less risk tolerance.
Lastly, call the Commissioner of Securities and Insurance if you need help. Their office can look at and help you understand investment information, including explaining the different types of investments available. One victim said that she thought the CSI was “ … a scary government division … but they were very helpful.” Commissioner Lindeen said many fraud cases would be avoided if people would call her office and check that the investment advisor they are working with is registered with the State of Montana, as is required by law. If there is something fishy going on, most of the time CSI will spot a red flag.
Perpetuators of fraud are con artists who work to gain your trust. Often they develop a trust relationship with a victim based on a common interest. Be a savvy investor and educate yourself and investigate prior to investing. Also, be on the lookout for exploitation of friends and loved ones. A change in their behavior could signal they are in financial trouble.
Thanks to the work of the Montana Commissioner of Securities and Insurance, more than $385 million in restitution has been paid to Montanans and $2 million in fines have been collected.
Lindeen says investors should know that “99 percent of all investment advisors and bankers (in Montana) are doing a great job.”
She does however, summarize all tips for avoiding fraud by stating, “Take responsibility for your own money.”
If you or a group you know would like a free copy of the “Gold Diggers” film, call 1-800-332-6148 or go to www.csmt.gov. The movie may also be viewed online.