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Investor Alerts

Investor Alerts

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.

One of the most important consumer tips is know what you are buying. This maxim certainly applies to investing in stocks. There are well over 20,000 companies whose shares trade either on a U.S. exchange or over-the-counter. FINRA is issuing this Alert to caution investors that, with so many companies and trading symbols, there is ample room for confusion—and good reason to carefully research any investment before making a purchase.

Private placement offerings can be a key source of capital for American businesses. But investing in private placements is risky and can tie up your money for a long time. As with other investments, you can also lose some or all of your money.

Recently, FINRA has received reports that scamsters are posing as employees of at least one well-known brokerage firm to obtain personal information. In a new twist to Internet "phishing schemes," which use spam email to lure you into revealing everything from Social Security numbers to financial account information, it appears that some fraudsters may be resorting to a time-tested method—the telephone call.

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