In light of the ongoing developments related to the current coronavirus (COVID-19) situation, and its impact on financial markets, the Minnesota Department of Commerce is reminding investors in Minnesota to beware of con artists seeking to capitalize on fear and uncertainty.
“We know con artists are opportunistic and use current events to cloak their schemes with an air of immediacy and legitimacy. Never make an investment decision without understanding what you are investing in, who you are doing business with, where your money is going, how it will be used and how you can get it back,” said Commerce Commissioner Steve Kelley. “Always ask if the salesperson and the security are registered with their state or provincial securities regulator.”
Commissioner Kelley also said investors should be on the lookout for scam artists trying to use the market downturn and the COVID-19 coronavirus to scare investors into so-called ‘safer, guaranteed investments.’
“If you have concerns about your retirement accounts or investments, talk to your financial professional,” Commissioner Kelley said. “Avoid making decisions based on panic or fear.”
To help investors identify common telltale signs of possible investment fraud, the Minnesota Department of Commerce has provided three questions to ask before making a new investment.
• First, is the investment being offered with a guaranteed high return with little or no risk? All investments carry risk that you may potentially lose some or all of your money. Anyone who says their investment offer has no risk is lying. No one can guarantee an investment return.
• Second, is there a sense of urgency or limited availability surrounding the investment? If the offer is legitimate, it will be there later. If someone offers you a ‘can’t miss’ investment opportunity and puts you on the spot, don’t be afraid to walk away.
• Third, is the person offering the investment, and the investment itself, properly licensed or registered? For the same reasons you wouldn’t go to an unlicensed doctor or dentist, you should avoid unregistered investment salespeople and their products.
“Make sure you have all the facts before you hand your money over to someone else to invest,” Commissioner Kelley said.
Commissioner Kelley also encourages investors to contact the Minnesota Department of Commerce with any questions about the investment professional they are working with or the product being offered. The agency is available at 651-539-1638 and online at firstname.lastname@example.org.
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Wherever you are in Minnesota, the Department of Commerce is with you every day. Whether you’re filling up on gas, purchasing a home, working to reduce energy consumption or rebuilding after a disaster—we are with you, no matter what.
The Minnesota Department of Commerce oversees more than 20 regulated industries, ensuring that Minnesota businesses are strong and Minnesota consumers are protected. Our mission is to protect the public interest, advocate for Minnesota consumers, ensure a strong, competitive and fair marketplace, strengthen the state’s economic future and serve as a trusted public resource for consumers and businesses.