AFCP Module 23 - Investor Protection Flashcards
CFPB
CONSUMER FINANCIAL PROTECTION BUREAU
U.S. government agency that makes sure that banks, lenders and other financial companies treat consumers fairly. Established in 2011.
SIPC
Securities Investor Protection Corporation (SIPC)
Targeted specifically at investors and provides coverage for investor losses due to a brokerage firm going out of business
SEC
U.S. Securities and Exchange Commission (SEC)
The SEC seeks to level the playing field for individual investors.
NASAA
North American Securities Administrators Association (NASAA)
Voluntary association of state, provincial, and territorial securities administrators which provides resources to help investors spot and avoid investment fraud.
FINRA
The Financial Industry Regulatory Authority (FINRA)
A not-for profit organization authorized by Congress in 2007 to protect investors which includes Investor Alerts and investor education tools.
An independent regulator not a government agency
IPT
The Investor Protection Trust (IPT)
Nonprofit organization devoted to providing independent, objective information needed by consumers to make informed investing decisions.
BrokerCheck - FINRA
Every brokerage firm and broker that does business in the U.S. must be licensed and registered with FINRA. BrokerCheck is on FINRA’s website so that clients can verify if a firm or agent is registered to sell securities, offer investment advice or both.
Affinity Fraudsters
Target members of identifiable groups by gaining the trust of the members in order to convince them to invest.
Ponzie or Pyramid Schemes
Investment frauds that pay existing investors with funds collected from new investors typically without investing the funds as promised.
Pump and Dump Schemes
First - a legitimate stock is promoted to try to boost the prices of a stock with false or misleading information.
Second - once price has been pumped up, the fraudsters, “dump” or sell the securities.
