NASAA Ranks Worst Investment Schemes in '04

January 26, 2004 ( - Mutual fund practices and variable annuities are two of the newest members of the Top 10 schemes investors are likely to see in 2004.

Joining the newest addition on this year’s version of the North American Securities Administrators Association’s (NASAA) annual survey of state securities enforcement officials includes many holdovers from years past, including this year’s number one:   Ponzi Schemes.   After Ponzi Schemes, ranked in order of prevalence and seriousness are:

  • Senior Investment Fraud
  • Promissory Notes
  • Unscrupulous Broker/Dealer Representatives
  • Affinity Fraud
  • Insurance Agent Securities Fraud
  • Prime Bank/High-Yield Investment Schemes
  • Internet Fraud
  • Mutual Fund Business Practices
  • Variable Annuities.

Ralph Lambiase, NASAA’s president and director of the Connecticut Division of Securities said in a news release “Investors face a complex maze of scams, schemes and scandals.   Our fight against fraud never stops because each year con artists discover new ways to fleece the public. Sadly, many of the age-old scams still work to cheat victims of their hard-earned savings as well. It pays to remember that if an investment opportunity sounds too good to be true, it usually is.”

Investors lose billions of dollars annually to investment fraud, Lambiase said. He cautioned that investors must remain vigilant in the fight against investment fraud. “All securities regulators, whether local, state, or federal, share the common goal of protecting investors,” he said. “I urge legislators to help us continue to do our jobs by ensuring that regulators have sufficient resources to protect our citizens.”

The complete list of the Top 10 scams, in addition to a Fraud Center, can be found at NASAA’s Web site, .   The Fraud Center includes tips on how to detect con artists and avoid becoming a victim; an Investor “Bill of Rights;” instructions on how to file an investment-related complaint; and contact information for each state securities regulator.