Washington State Department of Financial Institutions

News Release

Tuesday, January 29, 2008

Michael Stevenson, Director of Securities
PH (360) 902-8797 mstevenson@dfi.wa.gov

Lyn Peters, Director of Communications
PH (360) 902-8731 lpeters@dfi.wa.gov


DFI Joins NASAA In Reminding Consumers That Investment Scams Often Lurk Behind Ominous Economic Forecasts

OLYMPIA – The Washington State Department of Financial Institutions (DFI) Director Scott Jarvis joins the North American Securities Administrators Association (NASAA) in reminding investors not to allow recent negative economic news and stock market volatility to lead them into high-risk speculative investments. Perpetrators of many fraudulent schemes use gloomy economic headlines to lure unsuspecting investors.

“Investment scam perpetrators stay current on economic news in order to seem more legitimate and believable to their victims,” Jarvis said. “These predators will use investor fears to promote illegitimate schemes with promises of high return with little to no risk that, in reality, often leave investors holding nothing but empty wallets and drained bank books.”

Phony investment scheme perpetrators promising high returns to make up for losses in retirement accounts often target investors nearing retirement.

“We’re concerned that in trying to build a more comfortable cushion for retirement, entire retirement savings built over a lifetime of working could be cleaned out,” Jarvis said. “Hasty decision making could potentially stamp out any chance of retirement for some consumers, or financially ruin a current retiree.”

DFI and NASAA encourage investors to:

Investors, especially those nearing or in retirement, should be skeptical of any recommendation to liquidate a well structured, diversified investment portfolio to fund the purchase of an alternative investment product that may expose them to high commissions, high fees, excessive complexity, and undue risk.

About DFI
www.dfi.wa.gov ▪ 360.902-8700 ▪ 877.746-4334 ▪ In Espaņol 888.976.4422
The Washington State Department of Financial Institutions regulates a variety of financial service providers such as banks, credit unions, mortgage brokers, consumer loan companies, payday lenders, and securities brokers and dealers. The department has won numerous awards for its financial literacy and outreach programs developed to protect consumers from financial fraud. In addition to posting information about licensees and administrative actions, the DFI’s Web site features consumer tips on a variety of financial fraud-related topics.

About the Division of Securities
www.dfi.wa.gov/sd/ ▪ 360.902.8700
The mission statement of the Securities Division is "To protect the investing public and promote confidence in the capital markets."

This mission is accomplished through a variety of regulatory and enforcement tools, including:

DFI’s Securities Division is a member of the North American Securities Administrators Association, the oldest international organization devoted to investor protection. NASAA’ s membership consists of the securities administrators in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, the provinces and territories of Canada, and Mexico.

Contact information for other regulators is available on the North American Securities Administrators (NASAA) Web site, www.nasaa.org.