Investor Alerts

  • Stock Up on Information Before Buying Stock
    If you view market volatility as an opportunity to purchase more stock at a favorable price, make sure you look beyond the ticker symbol to confirm you are buying the right company. Many companies have similar names.
  • Know Before You Share: Be Mindful of Data Aggregation Risks

    If putting all your financial information online and in one place sounds like a good idea, there are many companies—often called data aggregators—ready to help you organize your financial life. However, before you share your account information and other sensitive financial details with data aggregators, it pays to know how these services operate, and how to protect yourself from potential privacy and security risks.

  • Crowdfunding and the JOBS Act: What Investors Should Know
    "Crowdfunding" generally refers to the use of the Internet by small businesses to raise capital through limited investments from a large number of investors. Under SEC rules, the general public can invest in capital raising by start-up companies. This advisory is designed to help the public understand the crowdfunding rules and processes so they can make informed decisions about the risks and rewards of investing in these early-stage businesses.
  • Binary Options Follow-Up Schemes: Don’t Lose Money Twice
    FINRA is issuing this alert to warn anyone involved in binary options trading—specifically through unregistered non-U.S. companies offering binary options trading platforms or services—to be on guard for potential follow-up frauds.
  • Customer Advisory Centers—What Investors Need to Know
    This Investor Alert focuses on a type of call center called a customer advisory center. It is a center that is staffed by securities professionals who may provide financial planning services, sell securities products, and receive commissions or other financial incentives for doing so. These centers have become common and, in some instances, can be sales-orientated.
  • Binary Options: These All-Or-Nothing Options Are All-Too-Often Fraudulent
    FINRA cautions investors who are considering binary options to be alert to potentially fraudulent schemes, and particularly wary of non-U.S. companies that offer binary options trading platforms.
  • Securities-Backed Lines of Credit – It May Pay to See Beyond the Pitch
    An increasing number of securities firms are marketing and offering securities-backed lines of credit, or SBLOCs, to investors. SBLOCs can be a key revenue source for securities firms, especially in times of solid market returns and growing investment portfolios, when investors may feel more comfortable leveraging their assets. Firms market SBLOCs as a type of financing and liquidity strategy that can unlock the value of your investment portfolio.
  • Automated Investment Tools
    Automated investment tools may offer clear benefits—including low cost, ease of use, and broad access. But it is important to understand their risks and limitations before using them.
  • Promissory Notes Can Be Less Than Promised
    FINRA is reissuing this alert on the heels of its disciplinary action related to the fraudulent sale of promissory notes to NFL and NBA players. The alert details the risks associated with promissory notes and the continued threat of promissory note schemes whose sole objective is to defraud investors.
  • Bitcoin: More than a Bit Risky
    FINRA is issuing this alert to caution investors that buying and using digital currency such as Bitcoin carry risks. Speculative trading in bitcoins carries significant risk. There is also the risk of fraud related to companies claiming to offer Bitcoin payment platforms and other Bitcoin-related products and services.
  • Closed-End Fund Distributions: Where is the Money Coming From?
    Closed-end funds have become popular products because some offer high distribution rates—as high as 6 percent or more. But be aware that a fund’s distribution rate is not the same thing as its return—even if the numbers might look similar. And before you invest, be sure you understand where the closed-end fund is getting the money to pay distributions. In some cases, part of the distribution comes from the return of principal.
  • Alternative Funds Are Not Your Typical Mutual Funds
    Alternative or "alt" mutual funds are publicly offered, SEC-registered funds that use investment strategies that differ from the buy-and-hold strategy typical in the mutual fund industry. Compared to a traditional mutual fund, an alternative fund typically holds more non-traditional investments and employs more complex trading strategies. Investors considering alternative mutual funds should be aware of their unique characteristics and risks.
  • "Phishing" and Other Online Identity Theft Scams: Don't Take the Bait
    FINRA is updating this Alert to tell you about some of the latest online identify theft scams targeting financial sector customers and to provide tips for spotting and avoiding these scams.
  • Reverse Convertibles: Complex Investment Vehicles
    Reverse convertibles are debt obligations of the issuer that are tied to the performance of an unrelated security or basket of securities. Although often described as debt instruments, they are far more complex than a traditional bond and involve elements of options trading. FINRA is issuing this alert to inform investors of the features and risks of reverse convertibles.
  • Structured Notes With Principal Protection: Note the Terms of Your Investment
    The retail market for structured notes with principal protection has been growing in recent years. While these products often have reassuring names that include some variant of "principal protection," "capital guarantee," "absolute return," "minimum return" or similar terms, they are not risk-free. FINRA and the SEC's Office of Investor Education and Advocacy are issuing this alert to make investors aware of these risks and to help them better understand how these products work.
  • Pre-IPO Offerings—These Scammers Are Not Your Friends
    It’s no secret that when a promising company emerges or an industry sector becomes “hot,” investors typically flock to get a piece of the action. But what happens when the company is privately held and investors can’t readily buy shares because the company has not conducted an initial public offering of its stock? FINRA is issuing this alert to warn investors about pre-IPO scams purporting to offer access to shares of Facebook and other popular, well known private companies.
  • If a Brokerage Firm Closes Its Doors
    Given the turbulence affecting the financial services industry these days-including recent announcements concerning Lehman Brothers-you may be wondering what would happen to your securities account if your brokerage firm closed its doors.
  • Seniors Beware: What You Should Know About Life Settlements
    Lately, more and more seniors are hearing about opportunities to sell their existing life insurance for cash in transactions known as life settlements. A life settlement, or senior settlement, as they are sometimes called, involves selling an existing life insurance policy to a third party--a person or an entity other than the company that issued the policy--for more than the policy's cash surrender value, but less than the net death benefit.
  • Subordination Agreements—Understand the Risks
    When you think of investments and brokerage firms, you probably think of opening an account and buying stocks, bonds, or mutual funds. When you enter into a subordination agreement, you are making an investment, but the investment is in the brokerage firm itself.
  • Putting Too Much Stock in Your Company—A 401(k) Problem
    We are issuing this Alert out of a concern that employees who have the opportunity to invest in company stock may be concentrating too much of their retirement savings in a single security. Of particular concern are employees who have all or most of their 401(k) assets in their employer's stock. If the stock takes a beating, so does your retirement savings.