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Investor Education Program
Department of Commerce & Consumer Affairs
Business Registration DivisionCommissioner of Securities Office
State of Hawaii DCCA, Office of the Securities Commissioner – Investor Education Program
Avoid Being A Victim: Know The
Threats That Investors Face
Investment Fraud
State of Hawaii DCCA, Office of the Securities Commissioner – Investor Education Program
Named for the swindler Charles Ponzi, who in the early 1900’s took investors for millions by promising 40% returns.
Ponzi Schemes
The premise is simple: pay early investors with money raised from later investors. There is no real underlying business.
Eventually the scheme collapses and the promoters walk away rich.
State of Hawaii DCCA, Office of the Securities Commissioner – Investor Education Program
Con artists are increasingly targeting religious, ethnic, cultural and professional groups by gaining trust and then stealing the savings of members of the group.
Affinity Fraud
It is human nature to trust people who are like yourself.
State of Hawaii DCCA, Office of the Securities Commissioner – Investor Education Program
Remember:
“Investigate before you invest – no matter who is selling the product.”
Affinity Fraud
In many cases, even the leader becomes a victim of what turns out to be a Ponzi Scheme or some other fraud.
State of Hawaii DCCA, Office of the Securities Commissioner – Investor Education Program
Firms and individuals who provide investment advice are required to pass certain examinations and get registered before they can offer their services to the public.
Hawaii law also requires all brokerages and their sales people to be registered under the securities laws with DCCA Securities Compliance Branch.
Unregistered Individuals Selling Securities
State of Hawaii DCCA, Office of the Securities Commissioner – Investor Education Program
It pays to remember that legitimate securities investment products not otherwise registered with the federal securities authorities must be registered with state securities authorities before they may be offered for sale to the public.
Unregistered Investment Products
Call our Compliance office at
(808) 586-2722 to verify if the investment being sold to you is registered.
State of Hawaii DCCA, Office of the Securities Commissioner – Investor Education Program
Regulators are concerned that investors are NOT being told about:
high surrender charges
fees and costs associated with this product
penalties for withdrawals steep sales commissions that
agents often earn when they move investors into variable annuities.
Variable Annuity Sales Practices
State of Hawaii DCCA, Office of the Securities Commissioner – Investor Education Program
Some investors also are misled with claims of guaranteed returns when variable annuities actually are vulnerable to the volatility of the stock market.
Variable Annuity Sales Practices
State of Hawaii DCCA, Office of the Securities Commissioner – Investor Education Program
Some financial professionals use designations that imply that they are experts at helping seniors with financial issues.
They market themselves by putting designations after their names such as “Certified Senior Specialist”, “Senior Advisor” or “Retirement Advisor”.
These designations are NOT recognized by the state.
Senior Designations
State of Hawaii DCCA, Office of the Securities Commissioner – Investor Education Program
Abbreviation Designation Organization
1 CFP Certified Financial Planner
International Board of Standards and Practices for Certified Financial Planners, Inc.
2 ChFC Chartered Financial Consultant
American College
3 PFS Personal Financial Specialist
American Institute of Certified Public Accountants
4 CFA Chartered Financial Analyst
Institute of Chartered Financial Analyst
5 CIC Chartered Investment Counselor
Investment Counsel Association of American, Inc.
These are the only recognized financial expert designations under the state securities laws:
Senior Designations
State of Hawaii DCCA, Office of the Securities Commissioner – Investor Education Program
Abbreviation Designation Organization
1 CSA Certified Senior Adviser Whatever
organization they say they’re with...
2 SS Senior Specialist
3 SE Senior Expert
4 RA Retirement Adviser
The following are not recognized as financial expert designations under the state securities laws:
Senior Designations
State of Hawaii DCCA, Office of the Securities Commissioner – Investor Education Program
Promoters of unsuitable investments are increasingly seeking potential investors, particularly seniors.
Investment Seminars
Promoters offer these investments with “higher returns and little or no risk”.
Promoters offer seminars and a “FREE MEAL”.
State of Hawaii DCCA, Office of the Securities Commissioner – Investor Education Program
Con artists use various sales pitches to lure seniors and others into turning over their money to them.
Sales Pitches
Salespeople who use these pitches can be a relative or friend.
They use “phrases” to get your attention and to pressure you into acting immediately.
State of Hawaii DCCA, Office of the Securities Commissioner – Investor Education Program
Avoid Being a Victim Contact the State Office of the
Securities Commissioner to check if the investment product AND the person are registered.
Securities Compliance Branch: 586-2722 Deal only with financial advisers, broker dealers or financial institutions having a proven track record with State and Federal authorities.
State of Hawaii DCCA, Office of the Securities Commissioner – Investor Education Program
Ask for written information on the investment product and the business. Read it carefully!
Avoid Being a Victim
Stay clear of investments promoting no downside or risk.
State of Hawaii DCCA, Office of the Securities Commissioner – Investor Education Program
DCCA Securities Branches:
1.Regulate Call 586-2722 To check your broker/adviser registration
2.Protect Call 586-2740 To report securities fraud (Toll Free) 1-877-477-2267
3.Educate Call 587-7400 To request educational information and presentations
How We Can Help
State of Hawaii DCCA, Office of the Securities Commissioner – Investor Education Program
Contact InformationDCCA Office of the
Securities Commissioner335 Merchant Street, Rm
203Honolulu, HI 96813
Office Hours: Mon- Fri/7:45am -4:30pm
Website: investing.hawaii.gov
To report investment fraud call: 586-2740 or Toll Free 1-877-
477-2267