published Friday, February 1st, 2013

Biz Bulletin: Minimize investment risk by knowing your rights

By Jim Winsett
  • photo
    BBB Chief Exective Jim Winsett
    Photo by Leigh Shelle Hunt

Q. I would really like to be more hands on with my investments, but I think doing so would be risky. Does the BBB have any tips to offer on best investing practices?

A. Investments take risk; sometimes a little, sometimes a lot. But smart investors know that the best way to minimize risk is to educate yourself about your basic rights, the protections you are entitled to under the law, and the common scams and frauds to avoid. Better Business Bureau has teamed up with the FINRA Investor Education Foundation to bring you up-to-date research and tools on investment fraud at BBB Smart Investing:

Studies have shown that investment scams have risen in the last decade. Baby Boomers are managing their own retirement funds and are particularly vulnerable. Sadly, in our marketplace we have documented two Ponzi schemes in the past few years. In 2011, according to the North American Securities Administrators Association (NASAA), state and provincial regulators in the U.S., Canada and Mexico launched more than 2,600 administrative, civil and criminal enforcement actions involving investors, one in five of whom were seniors.

The Financial Industry Regulatory Authority (FINRA) suggests four key steps to take before investing:

• Check out the seller. A legitimate investment professional must be licensed. Before giving out your personal information, ask whether the seller is registered with FINRA, the Securities and Exchange Commission (SEC) or your state securities regulator. Find registration and other information on individual brokers, securities firms and investment advisor firms at:

• Ask questions. Are you licensed to sell this investment to me? Is this investment registered with the SEC? What is in it for you, and what is in it for me?

• Check out the investment. Check whether the investment itself is registered. Confirm whether a security is registered with the SEC and get access to a company's financial information by using the SEC's EDGAR Database. Learn how at

• Attend a Smart Investing seminar. FINRA has also teamed up with the BBB to offer free community seminars on ways to become a more informed investor. The next seminar will be held on February 21, 2013 from 2:00-3:30 p.m. at the BBB. Be sure to RSVP your spot; you may RSVP via our Facebook page:

BBB also offers the opportunity to come out to your organization, church, or business and give a Smart Investing seminar to your group as well. For more information or to sign up please contact, Kasandra Helms at (423) 266-0396 or at

Get answers to your questions each Friday from Jim Winsett, president and CEO of the Better Business Bureau Inc., which serves Southeast Tennessee and Northwest Georgia. Submit questions to his attention by writing to Business Editor Dave Flessner, Chattanooga Times Free Press, P.O. Box 1447, Chattanooga, TN, 37401-1447, or by e-mailing him at dflessner@

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