Department of Commerce & Consumer AffairsDepartment of Commerce & Consumer AffairsCommissioner of Securities OfficeCommissioner of Securities Office

Investor Education ProgramInvestor Education Program

Lesson OneLesson One

NEVERNEVER Give Money To Anyone Give Money To Anyone

Unless You Know What They AreUnless You Know What They Are

Going To Do With Your Money.Going To Do With Your Money.

Lesson TwoLesson Two

Read Everything You SignRead Everything You Sign!!

If You Don’t Understand, Ask A FamilyIf You Don’t Understand, Ask A Family

Member Or Friend To Assist YouMember Or Friend To Assist You

2004 Top Ten Financial Scams2004 Top Ten Financial Scams

1.1. Ponzi SchemesPonzi Schemes2.2. Senior FraudSenior Fraud3.3. Promissory NotesPromissory Notes4.4. Unscrupulous BrokersUnscrupulous Brokers5.5. Affinity FraudAffinity Fraud6.6. Unlicensed Securities SellersUnlicensed Securities Sellers7.7. Prime Bank SchemesPrime Bank Schemes8.8. Mutual Fund Business PracticesMutual Fund Business Practices9.9. Internet FraudInternet Fraud10.10.Variable AnnuitiesVariable Annuities

2004 Top Ten Financial Scams2004 Top Ten Financial Scams

1.1. Ponzi SchemesPonzi Schemes2.2. Senior FraudSenior Fraud3.3. Promissory NotesPromissory Notes4.4. Unscrupulous BrokersUnscrupulous Brokers5.5. Affinity FraudAffinity Fraud6.6. Unlicensed Securities SellersUnlicensed Securities Sellers7.7. Prime Back SchemesPrime Back Schemes8.8. Mutual Fund Business PracticesMutual Fund Business Practices9.9. Internet FraudInternet Fraud10.10.Variable AnnuitiesVariable Annuities

Con Artists Use “Statements”Con Artists Use “Statements”

I Just Got A Hot Tip / This Is A Sure ThingI Just Got A Hot Tip / This Is A Sure Thing

No Other Investment Will Give You Similar ReturnsNo Other Investment Will Give You Similar Returns

Guaranteed, Or Your Money BackGuaranteed, Or Your Money Back

Everyone Who Invested Are RichEveryone Who Invested Are Rich

You Have To Invest Today / It Can’t Wait UntilYou Have To Invest Today / It Can’t Wait UntilTomorrowTomorrow

Con Artists Like ToCon Artists Like To

Use High Pressure Sales TacticsUse High Pressure Sales Tactics

Try To Make Things Happen… TODAYTry To Make Things Happen… TODAY

Likes To Deal In CashLikes To Deal In Cash

Try And Obtain Financial Account InfoTry And Obtain Financial Account Info

Con Artists Push Poorly Con Artists Push Poorly Understood Financial ProductsUnderstood Financial Products

They Don’t Want You To Know What You Are They Don’t Want You To Know What You Are BuyingBuying

Too Complicated To ExplainToo Complicated To Explain

Trust MeTrust Me

Simply Stated / Explained In GeneralSimply Stated / Explained In General

Con Artists Bring Out The Worst Con Artists Bring Out The Worst In YouIn You

Greed / Who Wants to be a Millionaire?Greed / Who Wants to be a Millionaire?

Fear / What If You Get Sick?Fear / What If You Get Sick?

Insecure / You Won’t Have Enough Money!Insecure / You Won’t Have Enough Money!

Con Artists Don’t Like To Be Con Artists Don’t Like To Be FoundFound

You Can’t Call Them Or Visit Their OfficeYou Can’t Call Them Or Visit Their Office

Con Artists Dress For SuccessCon Artists Dress For Success

Use Their AppearanceUse Their Appearance

Talks About How Wealthy They AreTalks About How Wealthy They Are

Con Artists Are Fair Weather Con Artists Are Fair Weather FriendsFriends

Once You Invest, They Are No LongerOnce You Invest, They Are No Longer

Friendly Or Come AroundFriendly Or Come Around

How To Protect YourselfHow To Protect Yourself

Do Your HomeworkDo Your Homework

Check With State RegulatorsCheck With State Regulators

Check With Better Business BureauCheck With Better Business Bureau

Ask For Things In WritingAsk For Things In Writing

Understand What You Are Investing InUnderstand What You Are Investing In

How To Protect YourselfHow To Protect Yourself

Don’t Be A “Courtesy Victim”Don’t Be A “Courtesy Victim”

Always Stay In Charge Of Your MoneyAlways Stay In Charge Of Your Money

Never Judge A Person’s Integrity By How They Never Judge A Person’s Integrity By How They Look & SoundLook & Sound

Monitor Your InvestmentsMonitor Your Investments

Don’t Be Afraid To Report FraudDon’t Be Afraid To Report Fraud

RememberRemember

If It Sounds Too Good To Be True… It Usually IsIf It Sounds Too Good To Be True… It Usually Is

If You Don’t Understand What You Are Investing In… You If You Don’t Understand What You Are Investing In… You Shouldn’t Be Investing In ItShouldn’t Be Investing In It

Understand The Risks / Every Investment Has Some Degree Understand The Risks / Every Investment Has Some Degree of Risksof Risks

The Greater Chance For Profit… The Greater The RiskThe Greater Chance For Profit… The Greater The Risk

And Most Importantly,And Most Importantly,Your Greatest Protector Against Fraud… Your Greatest Protector Against Fraud…

Is YourselfIs Yourself

FOR MORE INFORMATIONFOR MORE INFORMATION

Contact Our OfficeContact Our Office

State Of HawaiiState Of HawaiiDepartment Of Commerce & Department Of Commerce &

Consumer AffairsConsumer AffairsCommissioner of SecuritiesCommissioner of SecuritiesInvestor Education ProgramInvestor Education Program

335 Merchant Street335 Merchant StreetHonolulu, HI 96813Honolulu, HI 96813

(808) 587-7400(808) 587-7400