There’s smart. And then there’s CFTC SmartCheck for Investors

There’s smart. And then there’s CFTC SmartCheck.

Investors often fail to check the background of their financial professional, making themselves vulnerable to fraudsters. Additionally, investors can sometimes overlook signs that indicate there’s something wrong with the person, and instead focus on just the supposed profit. This can leave them vulnerable to fraud and financial predators.

To help, the U.S. Commodity Futures Trading Commission launched SmartCheck on November 19, 2014, a campaign designed to encourage investors to check out the background of their financial professional when they invest. Research has shown that much of investment fraud is committed by unregistered or unlicensed financial professionals, or by those with disciplinary history in their background. This information is ready available, but it is often ignored by investors.

SmartCheck provides investors with a single location to access multiple background checks spanning both derivatives and securities. This single act of checking out a financial professional’s background will help prevent fraud. Investors can visit for more information. In addition to these tools, the CFTC offers a variety of educational tools and information for savvy investors.

Below are the five common tactics used by fraudsters, which, if spotted, will improve any investors decision-making and fraud protection.

• What’s the rush? Investors should be cautious any time they are pressured or rushed into making a decision about an investment opportunity.

• Favors are rarely free. When the person on the other end of the trade offers to do a “small favor” for you in return for a big favor, it may be a ploy to distract you from the business at hand.

• Beware of the “Phantom Riches” tactic. This is when a con artist dangles the prospect of unrealistic wealth, enticing you with something you want but can’t have.

• Selling credibility. This is when the con artist tries to build credibility by appearing successful, claiming affiliation with a reputable organization or touting a special credential or experience.

• Watch out for third-party endorsements. When someone talks about a lot of people you know investing in the opportunity and that you shouldn’t be left out, it’s probably a good idea to keep your hand on your wallet and your wallet in your pocket until you learn more.

This material was developed from research conducted by the FINRA Investor Education Foundation. To learn more, visit

Original post on NCPW blog.

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