With any investment, whether promoted in person, by mail, telephone, or on the Internet, a wise investor should always slow down, ask questions, and get written information. Take notes so you have a record of what you were told, in case you have a dispute later.
- Is the investment registered with the SEC and the state securities agency in the state where I live or is it subject to an exemption?
- Is the person recommending this investment registered with my state securities agency? Is there a record of any complaints about this person?
- How does this investment match my investment objectives?
- Where is the company incorporated? Will you send me the latest reports that have been filed on this company?
- What are the costs to buy, hold, and sell this investment? How easily can I sell?
- Who is managing the investment? What experience do they have?
- What is the risk that I could lose the money I invest?
- What return can I expect on my money? When?
- How long has the company been in business? Are they making money, and if so, how? What is their product or service? What other companies are in this business?
- How can I get more information about this investment, such as audited financial statements?
We have provided this information as a service to investors. It is neither a legal interpretation nor a statement of SEC policy. If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.