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In honor of Independence Day, the bloggers at Securities Litigation Watch have posted a State of the Securities Union.
This year's wrap-up of securities events concludes that the state of securities has not changed much over the past year - but that numbers in securities settlements are on the rise, leading to larger compensation and payouts in securities litigation cases.
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While most of brokers, or financial representatives, are probably trying to do what they beleive is best for their clients, the brokers themselves may be misled, or just not know any better. Sometimes even decent brokers get convinced to sell a scam and don't realize they are participating in a scam.
The old adage about "if it sounds good to be true it probably is," is so often true. Be very wary of phone booth deals, viaticals, or the like. The NASD has some information on scams.
As part of the process of deciding who to work with to handle your investments you may consider looking up their background using NASD's Broker Check. This allows you to find out where your broker is licensed. It also allows you to find out about SOME prior complaints against your broker. It may be all the complaints, but it may not be all the complaints. You may wish to ask your broker about any complaints that show up using this tool, though.
The vast majority of claims I have seen in securities arbitration have stemmed from a buyout of some kind. There are probably several reasons for why this group makes up a disproportionate share of cases and I look forward to discussing those reasons.
However, there have been fewer large scale buyouts of empolyees in recent months. I am concerned for the 35,000 GM workers who recently accepted buyout packages and hope they receive suitable financial advice.