What's been a bear market on Wall Street, state securities regulators say, has created a bull market for fraud. 68-year-old Magdalena Scheller, a widow from Scottsdale Arizona learned the hard way believing her insurance agent's pitch that the Mid-America Foundation would protect her money, give a portion to charity and give her a tax break. "It was my husband's life's work, it was my investment it was my future earnings."
While Scheller lost $400,000, her unlicensed insurance agent got a commission and state regulators investigating Mid-America say its founder got rich. "Expenses for himself and his ex-Las Vegas stripper girlfriend, chartering airplanes," said Mark Sendrow, of the ArizonaCorporate Commission.
In it's top ten investment frauds state securities regulators urge investors to research both what they're buying, and who is selling. "Call your state security regulator to check that both the seller and the investment are registered," says Joseph Borg, President of the N. American Securities Administrators Association.
Also, look out for unexplained fees and unauthorized trades, regulators warn here, conflicting balances revealed fake statements, brokers hiding losses state regulators say with more complaints, and more investigations underway, investment fraud should be a national priority. "It can destroy lives as surely as street crime can," says Maerc Beauchamp, Exec. Director of the N. American Securities Administrators Association.
With what's left of her savings, Magdalena Scheller says she's taking no chances, and urges other investors to learn from her experience.
According to the North American Securities Administrators Association, unlicensed individuals such as independent insurance agents selling securities top the list of investment scams. To check out an investment or salesperson, contact the Texas State Securities Board.
Texas State Securities Board 208 E. 10th Street 5th Floor Austin, Tx 78701 P.O. Box 13167 Austin, Tx 78711-3167 (512) 305-8300 -or- (512) 305-8310 (fax) (www.ssb.state.tx.us )