Ask and Check (2024)

Many financial scams involve unlicensed individuals selling unregistered investments—ranging from stocks, bonds, and oil or gas deals to fictitious instruments, such as prime bank investments. That's why it is particularly important to "Ask and Check" about investments and investment professionals before you invest. Regardless of your trust or ties, or prior dealings with the professional, do your homework.

Check Out the Seller

If a salesperson is trying to sell you an investment, check them out by following these steps.

Step 1: Ask "Are you licensed to sell me this investment?"

Legitimate investment professionals—including registered financial professionals (also known as registered representatives), investment advisers and insurance agents—must be licensed with FINRA, the Securities and Exchange Commission (SEC) or your state securities or insurance regulator before they can sell you anything. If they say they aren't licensed, say good bye—and don't buy.

Step 2: Check.

If they say they are licensed, check them out as follows:

If They Say They Are a ...Look HereHelpful Hints
Registered Financial Professional
  • If you find the individual on BrokerCheck, click the "More Details" button below their name to view their summary report.
    Ask and Check (1)
    The summary report provides information on the individual's employment history, qualifications, disclosure events and more. You can also download a detailed report on the individual.
  • To interpret what you find, see FINRA BrokerCheck Tips below.
  • Use both FINRA BrokerCheck and contact your state. There's helpful information in both places.
Investment Adviser
  • If you find the individual on BrokerCheck, click the "More Details" button below their name to view their summary report.
    Ask and Check (2)
    The summary report provides information on the individual's employment history, qualifications, disclosure events and more. You can also download a detailed report on the individual.
  • To interpret what you find, see FINRA BrokerCheck Tips below.
  • If you find the firm on IAPD, click on its name to view its Form ADV (the investment adviser registration form).
  • For disciplinary information about the firm, scroll to the bottom of the page, and click "Item 11Disclosure."
  • If you find the individual on IAPD, click their name and click this button in the upper right side of the screen:
    Ask and Check (3)
    This will give you information on the individual’s employment history, qualifications, disclosure events and more.
Insurance Agent
  • Requirements and information available vary by state.
  • Be aware that "captive" agents can sell only the policies and products their company offers. Independent insurance agents typically represent multiple companies.

Find out more about BrokerCheck and get tips on searching for individual or firms.

Check Out the Investment: Is It Registered with the SEC?

Take these steps to check whether a recommended investment is registered with the Securities and Exchange Commission (SEC):

Step 1: Ask the person offering the investment, "Is this investment registered with the SEC?"

If the answer is no, ask why the investment is not registered. Not all securities offerings must be registered with the SEC—such as those issued by municipal, state and federal governments. The SEC also provides exemptions for certain intrastate offerings and small public and private offerings under a rule known as Regulation D. For more information, read the SEC's Microcap Stock: A Guide for Investors.

Step 2: If yes, then use the chart below to help you check that this is in fact the case.

Where to CheckWhat You GetHelpful Hints

SEC—EDGAR Company Search

Call the SEC's Office of Investor Education and Advocacy toll-free at (800) SEC-0330 if you have trouble using EDGAR or have questions about a company or investment.

  • Free public access to corporate information, including registration statements, prospectuses, annual reports with audited financial statements on Form 10-K and quarterly reports on Form 10-Q.
  • Information about recent corporate events reported on Form 8-K.
  • Confirmation of whether a company is using an exemption under Regulation D.
  • Read the SEC's tips for researching investments using EDGAR and other tools.
  • Be alert to changes in the company's name and trading symbol, reported through SEC Form 8-K.
  • Check if the company is filing current reports by looking for a 10-K report within the past year.

Your State Securities Regulator

  • Information about the investment beyond registration status, such as whether a promotion appears in violation of state securities law.
  • Ask if your state regulator is aware of any problems associated with the company or the type of investment.
  • You can also contact the North American Securities Administrators Association at (202) 737-0900.

Keep in mind that registration with the SEC does not guarantee that an investment will be a good one or immune to fraud. Likewise, lack of registration does not mean the investment lacks legitimacy. The critical difference is the extreme level of risk you assume when you invest in a company about which little or no information is publicly available. SEC registration carries a number of advantages for investors, including disclosure of financial and other information that can help investors assess whether to invest in a company's securities.

To check out the registration of the following types of investments, follow these steps:

Mutual FundsVisit the SEC's EDGAR Mutual Fund Search. If you find the mutual fund there, then it is registered with the SEC.

Variable Annuities

Variable Insurance Products

Visit the SEC's EDGAR Variable Insurance Product Search. If you find your variable annuity or other insurance product, then it is registered with the SEC.

Exchange-Traded Funds (ETFs)

Exchange-Traded Notes (ETNs)

Closed-end Funds

Visit FINRA Market Data. Click on the link that says Company Information in the far left column to search for your investment. If you find the ETF, ETN or closed-end fund on Market Data, it is registered with the SEC.
Ask and Check (2024)

FAQs

What is the check called in England? ›

Cheque is the British English spelling for the document used for making a payment, whereas American English uses check. Check also has a number of other uses as a noun (e.g., a check mark, a hit in hockey, etc.)

How to know if a broker is legit? ›

Visit FINRA BrokerCheck or call FINRA at (800) 289-9999. Or, visit the SEC's Investment Adviser Public Disclosure (IAPD) website. Also, contact your state securities regulator. Check SEC Action Lookup tool for formal actions that the SEC has brought against individuals.

How do you know if a financial advisor is legit? ›

An advisor who believes in having a long-term relationship with you—and not merely a series of commission-generating transactions—can be considered trustworthy. Ask for referrals and then run a background check on the advisors that you narrow down such as from FINRA's free BrokerCheck service.

How do I know if an investment company is legitimate? ›

HOW TO AVOID INVESTMENT SCAMS. Use www.BrokerCheck.finra.org to check if a broker is a licensed or if someone has complained about them. Read about and understand any investment before you give someone your money. Ask for information in writing.

Why do Americans say check instead of bill? ›

One of the earliest known references to the use of “check” at restaurants dates back to the 1869 novel “Patience Strong's Outings” by Adeline Dutton Train Whitney, which includes the line “I let her settle for the dinner checks.”

How do you ask for the check in British? ›

In this case, you would say: “Excuse me, could I have the cheque, please?” Again, we use 'excuse me' to get the attention of the waiter or waitress, followed by the polite request 'could I have' for the item you want, which is 'the cheque. Finally, we add 'please' to the end to make the request even politer.

How to spot a fake trading platform? ›

Besides trolling for victims on social media or messaging apps, here are 10 other telltale signs an online trading platform is a fraud:
  1. It isn't registered to trade forex, futures, or options.
  2. Trades crypto, but not registered as a money service business.
  3. No physical address, it's clearly fake, or offshore.

How to spot a forex scammer? ›

Unrealistic Promises: Forex scammers often make unrealistic promises of high returns or guaranteed profits. Remember, trading in the forex market involves risks, and no legitimate broker can guarantee profits. Poor Customer Reviews: Research and read customer reviews about the broker or investment company.

How far back does a broker check go? ›

A BrokerCheck report for an individual who meets any of these criteria will typically include the same information categories as outlined above for individuals registered within the last 10 years. BrokerCheck may have limited information for individuals whose last registration ended before August 1999.

What to avoid in a financial advisor? ›

These 10 statements can help you identify an advisor who is better to walk away from:
  • "I offer a guaranteed rate of return."
  • "Performance is the only thing that matters."
  • "This investment product is risk-free. ...
  • "Don't worry about how you're invested. ...
  • "I know my pay structure is confusing; just trust me that it's fair."
Mar 1, 2024

How to tell if someone is a fiduciary? ›

1 – Ask them directly: A genuine fiduciary will straightforwardly affirm their role and commitment to act in your best interests. 2 – Review the advisor's credentials: Certifications such as CFP® (Certified Financial Planner) or AIF® (Accredited Investment Fiduciary) often indicate a fiduciary standard.

How do you know if a broker is scamming you? ›

20 Ways to Check If Your Broker Is Safe or a Scam
  1. Regulatory Compliance. Verify that your broker is regulated by a recognised financial authority locally or globally. ...
  2. Reputation and Reviews. ...
  3. Contact Information. ...
  4. Background and History. ...
  5. Client Funds Segregation. ...
  6. Account Security. ...
  7. Trading Platform. ...
  8. Fees and Spreads.

Can I check if a company is real? ›

Secretary of State website

Each US state's Secretary of State office lists registered businesses, a key resource for state real company-specific company verification.

How do I know if a financial company is legit? ›

Legitimate lenders must be registered with consumer protection agencies such as the Consumer Financial Protection Bureau (CFPB) and hold various licenses to operate. If the lender can't verify its registration or license status, you're probably dealing with a scammer.

What is pay check called in UK? ›

Each employee, by law, needs to receive a payslip from their employer for a specific timeframe (weekly, bi-weekly or monthly payouts).

Do they say bill or check in England? ›

In the UK, you ask for the bill; in the USA, it's the check. If you mix them up, you'll still be understood clearly, but it will help with your cultural immersion and your confidence if you remember the correct term and practice getting it right. You can drop in a few slang words too, just to really impress the locals.

Do they use checks in England? ›

While not as common as card payments and bank transfers, cheques remain a valid form of payment within the UK.

How do you pronounce check in the UK? ›

When pronouncing the word "check", it is important to focus on the vowels and consonants.
  1. American Pronunciation: /tʃɛk/
  2. British Pronunciation: /tʃɛk/
  3. IPA Notation: American and British: [tʃɛk]

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