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Investigate Before You Invest

Wednesday, July 8, 2009
DISB offers extensive background information on stockbrokers and investment advisers.

(Washington, DC) — As Bernard Madoff recently received 150 years in prison for engineering an extensive Ponzi scheme, his, and other high-profile breaches of trust by financial professionals are strong reminders of the need to check the background of financial professionals before you trust them with your money, the DC Department of Insurance, Securities and Banking (DISB) said today.
“Information is an investor’s best defense against investment fraud,” said DISB Commissioner Thomas E. Hampton. “The information you need to make an informed choice about who you entrust with your money is right at your fingertips. Our office should be your first call for detailed background information about your stockbroker or investment adviser. And the time to make that call is before you turn over any money.”

DISB offers investors extensive employment, disciplinary and registration information about their stockbroker or investment adviser. As an investor, you can request a public report of background information on any stockbroker, brokerage firm, investment adviser and investment adviser firm registered to do business in the state.

To receive background information about a stockbroker, call DISB at (202) 727-8000 and ask the Securities Bureau for all materials from the Central Registration Depository (CRD) about that individual. For similar information about an investment adviser, ask for all materials from the Investment Adviser Registration Depository (IARD). These computerized national databases contain licensing and registration information on more than 650,000 stockbrokers and over 260,000 investment advisers. You can also receive information on their employment, examination and disciplinary histories, civil judgments, arbitration decisions, criminal convictions or indictments, bankruptcies, as well as pending complaints, disciplinary actions, arbitration and civil proceedings.

“This information is easy to obtain, and DISB as a state securities regulator wants to help you make informed decisions before you invest your hard-earned dollars,” Commissioner Hampton said. “While the vast majority of the stockbrokers, brokerage firms, investment advisers and investment adviser firms are honest and reputable, it pays to remember that just like many other professions, there are those individuals and firms who are not. If you suspect that something is wrong, the sooner you call us, the better. Your call also might help prevent others from being harmed by a fraudulent scheme.”