Investor Alerts

FINRA is issuing this investor alert to help investors better understand smart beta products.

If you're like many investors, your portfolio contains bonds. When you purchased those investments, you may not have given much thought to whether you'd be able to sell them when you want to. FINRA is issuing this alert to educate investors about bond liquidity, and the potential for decreased liquidity and investment losses for those who sell their bonds before maturity at a time of market stress.

FINRA is issuing this alert to inform brokerage account holders, family members and other beneficiaries about the value of preparing for the inevitable, and the general process firms follow when an account holder passes away. We also provide tips for making the transfer process as efficient and trouble-free as possible for account holders and also for heirs and beneficiaries.

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.

A range of programs and lawsuit settlements have resulted in new money coming into Indian Country. If you are a recipient or potential recipient of this new money, you may have questions about how to manage and invest the assets, and how to select and work with an investment professional. The Financial Industry Regulatory Authority (FINRA), the FINRA Investor Education Foundation and First Nations Development Institute teamed up to develop the following tips to help you confidently manage this new money, as well as avoid financial fraud.

Precious metals are notorious for price movements that can pique investor interest during upswings and downswings alike. If you are thinking that now is the time to invest in physical precious metals such as silver, gold or maybe palladium or platinum, be aware of the risks involved. They include the potential for high-pressure sales tactics and even fraud.

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.

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 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 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.

Trading in most stocks takes place without interruption throughout the trading day—but some stocks are subject to short-term trading halts and longer-term trading suspensions. In rare instances when the market experiences a very steep decline, trading across the entire market can be stopped. This alert explains how, when and why interruptions in trading occur—and what investors can do in some of these situations.

FINRA is issuing this Alert to inform investors of the features and some particular risks of ETNs—and to suggest questions to ask when considering investing in these products. While the names may sound alike, investors should also understand that ETNs and exchange-traded funds (ETFs) differ in some fundamental and important ways.

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.

FINRA is issuing this Alert to warn investors about investment scams that promote the latest "hot" gold stock and to provide information on how to invest wisely in gold.

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.

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.

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.

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.

Sales of equity-indexed annuities (EIAs) have grown considerably in recent years. Although one insurance company includes the word "simple" in the name of their product, EIAs are anything but easy to understand.

FINRA updated and is reissuing our 529 saving savings plan investor alert to highlight Jobs Act changes, and to remind investors to closely consider both their state of residency and the applicable fees—including fees associated with share classes—when making 529 investment decisions.

The SEC staff and FINRA are issuing this Alert because we believe individual investors may be confused about the performance objectives of leveraged and inverse exchange-traded funds (ETFs).

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.

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.

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.

If you own a life insurance policy, you may have been approached to exchange it for another new policy. You need to know that even though the tax laws make the exchange income tax free and the new policy may appear better to you, you may be losing - not gaining - if you make the exchange.