Investigate Before You Invest

Each year, Mississippians lose thousands of dollars to securities fraud.  Many investment scams are sold through "infomercials" on television or over the phone by high-pressure salespeople promoting get-rich-quick schemes.  With their slick pitches, con artists will try to cash in on just about any type of investment.

Anyone can become the victim of securities fraud.  The techniques practiced by these swindlers are well-rehearsed and often hard to resist.

To help you outsmart the con artists, the Business Regulation & Enforcement Division of the Secretary of State's Office has put together some tips as part of our investor education program.

HERE'S WHAT WE DO:
The Business Regulation & Enforcement Division is responsible for regulating the offer and sale of certain types of investments known as securities.  These may include many types of stocks, bonds, limited partnerships, some oil and gas interests, and investment contracts.

Our major activities include registration of securities offerings, the licensing of stockbrokers and investment advisors, and the investigation of alleged violations of the securities laws.

We are also very dedicated to investor education, and hope that this web page is useful for many Mississippi investors.

HERE'S WHAT YOU CAN DO:
Before investing any money, you should carefully assess the following:

• Your investment goals
  Are you primarily interested in long-term growth, a steady income stream, tax savings, quick profits, or some combinations of these?

• How much can you afford to invest -- be realistic?
  Can you afford to lose all of the money you plan to invest?  Do you have sufficient cash reserves which can be reached rapidly in case of personal emergency?

If you are considering the assistance of a stock broker, investment advisor, or financial planner, use great care when selecting one.  Ask for recommendations from friends you know to be successful investors, business colleagues, your lawyer, accountant, banker, or other professionals, whom you may trust.

PRE-INVESTMENT CHECKLIST
Before putting your hard-earned cash into any investment, be sure to ask the following questions:

About yourself:

• Can I afford to lose my entire investment without putting undue burden on myself?

• Am I only dealing with people who treat me with courtesy, respect, and give me full explanations?

About an investment:

• Is it registered in Mississippi? (Call the Secretary of State's Business Regulation & Enforcement Division)

• Does it promise to provide the specific advantage and/or return I need?

• What is the basis for the "purchase price"?

• Are there limitations on the resale of these securities?  Have they been explained to me?

• Have I received, read, and understood a written prospectus for this investment?

About a company offering an investment:

• Is the company offering the investment qualified to do business in Mississippi? (Call the Secretary of State's Business Regulation & Enforcement Division)

• Where is the company located and what kind of business is it?

• How long has the company been in business?   Has it been successful?

• Have I been told how the company intends to use my money?

• Have I received a reliable and current financial statement of the company?

• Are there lawsuits or bankruptcies pending against the company or any of its officers and directors?

• What information do I have about the officers, directors, and other personnel of the company?  Are they trustworthy?

A MESSAGE FROM THE SECRETARY OF STATE
Every year, unsuspecting Mississippians are swindled out of their hard-earned dollars by fast-talking, high-pressure salespersons pitching a variety of phony investment schemes.

The money put into these phony investments could have been invested in legitimate Mississippi businesses to help this state move forward.  The legitimate securities industry fulfills a vital role in capital formation, which is necessary for Mississippi's economic development to bring in new jobs.  This activity drives the state's economic engine.

The Business Services Division of my office wants to remind Mississippians to investigate before you invest. People from all walks of life can become victims of a securities swindle; it could happen to you.

There is always some risk involved in business.  Our office cannot protect you against deals that don't live up to expectations, whether due to business reversals, poor management, tax changes, or changing economic trends.  We can warn you against investing in unregistered or fake securities.

If a securities salesperson contacts you, ask these questions.  If they refuse to answer some or any of them, or if the answers you receive do not satisfy you, hang up and do not invest.  Instead, call the Business Services Division.   Help us put securities swindlers out of business.

DELBERT HOSEMANN
Secretary of State