Department of Commerce and Regulation
For Immediate Release: September 18, 2001
For more information: Mr. Gail Sheppick, 773-4823

State Securities Regulators Warn of Opportunistic Investment Scams Following Attacks on World Trade Center, Pentagon

(Pierre) -- In the wake of terrorist attacks in New York and Washington, DC, David Volk, Secretary of the Department of Commerce and Regulation, is warning investors to be on the lookout for opportunistic scams similar to those associated with the Year 2000 computer bug.

Cold-calling telephone salespeople, advertisements, or Internet postings that tout commodities, exotic financial products, or supposed anti-terrorist technologies should be a red flag for investors, Volk said. Investors should be especially wary of enticements to send their money offshore to so-called "safe havens." 

"In times of tragedy, confusion, fear and uncertainty, there are always those who will attempt to prey on the investing public," Volk said. "In the wake of last week’s tragedies, investors should resist the temptation to make hasty decisions about their investments or finances. Our economy is the most diverse and productive in the world, and the United States is and will remain the world’s financial capital."

Recalling that many con artists exploited fears associated with the Year 2000 computer bug to tout investments in precious metals, emergency preparedness scams and non-existent technology companies, Volk urges investors to:

• Hang up on aggressive cold callers promoting "safe" investments such as precious metals, oil, or gas and ignore unsolicited e-mail or Internet chat room talk about small companies with new anti-terrorist technologies or products. 
• Contact the South Dakota Division of Securities to check that both the seller and investment are licensed and registered.  
• Request written information that fully explains the investment, such as a prospectus or offering circular. The documentation should contain enough clear and accurate information to allow you or your financial adviser to evaluate and verify the particulars of the investment.  
• Use common sense. Some things really are too good to be true. Get a professional, third-party opinion when presented with investment opportunities that seem to offer unusually high returns in comparison to other investment options. Pie-in-the-sky promises often signal investment fraud.

If you would like more information on investing or to check whether a person selling securities is licensed to do so in South Dakota, contact the South Dakota Division of Securities. The Division can be reached by writing 118 West Capitol Avenue, Pierre, SD 57501 or by calling 605-773-4823. The Division's website also contains information for consumers on purchasing securities.

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