The Secretary of State’s Investor Protection Division “can tell you if investor is registered with the state, if the product is registered, or if they’ve had any problems in Missouri before, because if they have, that ought to be a red flag warning,” says Secretary Robin Carnahan.
Her office has released a list of the top threats to Missouri investors, off-books sales topping the list. Other options that can cause financial detriment to the unwise are real estate investor schemes, oil and gas investment opportunities, variable and euqity indexed annuities and generally improper sales techniques.
The report, (below) also contains the top actions Missourians can take to protect their savings. Detailed information on the top threats facing Missouri investors is available on the investor protection website at or by calling the Investor Protection Hotline at 880 721-7996. “Each year, the Missouri Secretary of State’s Securities Division takes a close look at recent complaints, investigations, and enforcement actions to identify the top threats facing Missouri investors. Simply knowing these common threats may help you to spot a scam. Also, learning the tips to protect your savings may help you avoid a loss before it is too late,” Carnahan says.

Top Threats to Investors in 2010

Off-Books Sales. If your broker offers you an investment on the side instead of one sold through their employer, call the Investor Protection Hotline. These “off books” investments are not only illegal, they can be especially risky.

Real Estate Schemes. Investments in the turbulent real estate market have been pitched as a “sure thing” across the state, particularly in Southwest Missouri, but unsuspecting investors can suffer damaging losses.

  • Oil/Gas Investment Opportunities. Oil and gas investment opportunities, especially those pitched as “joint ventures,” may be misleading and bring high risks.
    Variable and Equity Indexed Annuities. While these annuities might be a sound investment for some, many older investors find themselves unable to access their savings, which may be locked up for years unless a substantial penalty is paid.
    Improper Sales Techniques. Some sales techniques, such as promising guaranteed returns or using scare tactics, are misleading and violate Missouri law. And remember, scam artists often try to find new victims though family friends or members of their church.
  • Tips for Protecting Your Savings
    Call the Investor Protection Hotline. The first step you should take when considering any investment opportunity is to call the Investor Protection Hotline: 800 721-7996. Our staff can tell you whether an investment is properly registered or if an individual is licensed to sell securities in Missouri.
  • Report Anything Suspicious. If you sense something isn’t right with your account statement, if you can’t get your advisor to contact you, or if you can’t easily understand just how your investments make money, you should contact the Missouri Securities Division.
  • Understand Your Goals. Before handing over your hard-earned money to anyone, you should evaluate your investment goals. How much risk can you tolerate? When will you need access to your money? What kind of tax issues will you face? Then, make certain that your financial advisor understands these same things.
  • Get It on Paper. If you have questions about your investments, insist on complete, easy-to-understand documentation which includes all fees, costs and charges. When real estate is involved tell the investment promoter you want a complete prospectus and proof of ownership.
  • Know When You May Need Access to Your Savings. Too many investors believe they’ve made a safe investment decision only to find that they can’t access the money they’ve put aside. Variable annuities and equity indexed annuities, for example, can leave an investor without access to their savings for many years unless they pay large penalties.