Feeds:
Posts
Comments

Posts Tagged ‘FBI’

They say white-collar crimes tend to increase in times of economic stress.  This is one of those times.  And it’s all the more important to be watchful.

For most of us, our personal identities extend beyond just our name.  In many ways we are also our online profiles and our credit, too.

Identity Theft: A Growing Problem and Cost to All of Us

Right now, there are scammers out there trying to steal not just what you own but trying to steal you.  Identity theft is a real problem and a drag on our economy. The Federal Trade Commission (FTC) estimated in 2006 that more than 3.6 million households affecting over 9 million people were victims of identity theft. One study noted that the cost to consumers was nearly $57 billion dollars (that’s with a ‘B,” folks) in 2005.

And according to the Government Accounting Office (GAO-02-363, March 2002), this costs the federal government (and us taxpayers), too.  The average cost for a financial crime investigation is about $15,000 for the Secret Service, more than $11,000 for the US Attorneys and nearly $20,000 for the FBI.

I have a client whose niece works for a regional office of the FBI who has sent out around this notice for a new twist on a “phishing” scam.

Watch Out for Folks Gone Phishin’

Phishing is where the scammer posing as a legitimate company or authority tries to get an unwary consumer to divulge valuable personal information like a Social Security number, account number or other details like a date of birth.

The Jury Duty Hoax – A Twist on An Old Scam

In this latest reported scam, the FBI has confirmed that scammers are calling and posing as “jury duty coordinators” saying that an arrest warrant has been or will be issued for failing to show up for a recent jury summons.

If you protest that you never received a notice, the “coordinator” will ask for your Social Security number, date of birth and address so that he can verify the information and cancel the arrest warrant.

Most of us are sufficiently deferential (or even scared) of the court system so the scammers are relying on us to simply roll over and give them what they ask for on the phone.  In some cases, the “coordinator” uses intimidation and bullying tactics to get you to comply.

Once you give them your information the scammers have hit the jackpot.

So far this type of phishing scam and fraud has been reported in eleven states including Illinois, Ohio and Colorado.

So be wary of unsolicited calls asking you to provide your Social Security number and other personal identifying information.  No legitimate government agency or business you deal with will ever ask you to just give them your stuff.  They may ask you to verify what they have (if not ask them to read out what they have).  And if you’re ever unsure, ask for the website and a call back number so you have time to check it out independently.

So protect yourself and others you know by letting them know about this scam.

Go to the FBI website to check out details on this and other scams.

And if you ever suspect a scam, you can also check out the website for the Federal Trade Commission as well.

Advertisements

Read Full Post »

Da-Dum … Da-Dum … Da-Dum Da Dum Da Dum … Da Da Da Da Da Da Da Da … Da Da Daaaa …..

Sound familiar?  While you could mistaken it for my toddler son Spencer calling me, it’s really the eerily memorable theme song from the classic water thriller Jaws. (Or at least that’s what it sounds like when I’m singing it).

Like many, after seeing this movie I was more than a bit afraid to go swimming even in my own backyard pool.  Let’s not even talk about trips to the beach!

Just as investors thought it was safe to get back into investing waters as the market continues to sport positive numbers on several indexes like the Dow and S&P, news of another potential scandal comes out that may cause investors to pause once again.

After a decade that has included three stock market busts, a real estate bubble burst, a mutual fund industry timing scandal, the greatest Ponzi scheme ever and a whole lot of smaller ones coupled with a long and wearying Recession and near financial meltdown, we now have another cloud on the horizon.

Since a November 20 article in the Wall Street Journal, there has been an increasing amount of media scrutiny about a widening investigation by the FBI, Securities and Exchange Commission and the New York Attorney General’s Office into possible insider trading by several well-known mutual funds, hedge funds and investment managers.

How this plays out is anyone’s guess.  But the last time there was a wide-spread scandal in mutual funds, the bedrock investment that allows many retail investors to get in on the action of Wall Street, it resulted in not only bad PR but in more than $3 billion paid out to investors to make up for the inequity of favorable market timing by a select few.

In fact more than six years after the scandal, I continue to receive checks in the amounts ranging from $2 to $30 from mutual fund companies that used to hold my investments.

Will this result in the same sort of long-tail remedy?  Who knows but the more immediate concern will be if individuals decide that this is one more piece of evidence that the Wall Street game is rigged against them.

I hope that is not the case.  Throwing the baby out with the bath water will ultimately do no good for an investor saving for long-term goals.  Sure, you can take all your marbles and go home.  In fact, more than $90 billion has been withdrawn from mutual funds since the beginning of 2009.

The general gist of this investigation is centered on so-called expert networks that offer research of various stocks to investment managers.  Since investing is all about determining what is a fair value to pay for the stock of a company, it’s important to understand the company’s cash flows and things that can affect the top and bottom line.  So certain research companies go about like investigative reporters developing contacts with companies, asking questions about new products or sales and then reporting this to stock analysts that work at other firms.

There is nothing inherently wrong or illegal about asset managers using third-party research.  Since there’s no easy to see bright line about what is or isn’t insider information in some of these cases, nothing wrong may have been done.

The problem for many investors right now is one of perception.  There is the cockroach theory in accounting and finance.  When you turn on a light in a room and you see something scampering off, it’s almost safe to say that there were probably more bugs running about when the lights were off.  So to avoid future surprises, you might want to relocate from the apartment and in investing you might be inclined to also get out of Dodge.

I think it’s too early to simply paint the whole industry with a broad brush and say that they’re all corrupt.  Yes, there were some bad apples.  But you should think about this sentiment best expressed by Frank Black in Investment News (11/29/2010, page 2):  If they are getting inside information … why did the average fund decline almost 50% in 2008-2009?

Trying to get a leg up on the other guy is pretty normal in a competitive marketplace.  Information is king after all.

But there are more honest fools in this business than corrupt ones.

Even a lump of coal is something useful even if it is dirty and messy right now.

So stay calm and avoid shooting first before asking questions of your financial adviser.  This is just another type of risk to be aware of and there are ways to lessen the adverse impact on your long-term portfolio and goals.

Read Full Post »

%d bloggers like this: