Investor Education Booklets
Please note: some of the following resources were originally printed with now outdated contact information for the Securities Division. Our website is www.sosnc.gov. Our telephone number is (919) 814-5400 or (800) 688-4507, and our fax number is (919) 814-5596.
Are you an informed investor? Investment Scams in the Metaverse: How to Protect Yourself from Losing Real Money in the Virtual World
For much of human existence, story tellers, science fiction writers, film makers, and technologists have fantasized about what virtual worlds might look like in the future. With advances in technology including more enhanced digital experiences that blur the line between the physical and digital worlds, the future has arrived in the form of the “metaverse.” A series of virtual worlds, the metaverse is the latest technology that for some people offers new ways to interact and collaborate, while others see it as new means to perpetrate financial scams and investment fraud. This alert highlights some current metaverse investment scams and discusses ways that investors can protect themselves. To find out more, click the title to download a copy of this alert.
Are You an Informed Investor? Financial Advice via Social Media: The Rise of the "Finfluencer"
Social media has become one of the main ways in which people connect to one another. With newsworthy stock market volatility dominating Main Street news headlines since early 2020, interest in investing has seen a dramatic increase. According to Bloomberg News, downloads of investment apps rose by 20% in 2021 from the year prior while actual time spent on these apps jumped by 90%. Most Millennials and Gen Z-ers are using social media sources for information about investing rather than relying on more traditional sources of investing information such as brokerage or investment advisory firms. Influencers have taken notice and social media has become more saturated with financial content than ever before, leading to the rise of the financial influencer or “finfluencer.” This investor advisory explains what financial influencers are, how they are compensated, what you should keep in mind when you are exposed to financial influencers’ content, red flags to watch out for, and resources available to you. To find out more, click the title to download a copy of this alert.
Are You an Informed Investor? Don't Get Swept Away by a Romance Scam
Dating apps and social media platforms may be good ways to meet new people but be cautious if someone turns a burgeoning online romance into an opportunity to solicit an investment or ask to borrow money. Scammers are increasingly posing as potential romantic partners to lure people into fraudulent investment schemes. This alert discusses some common tactics fraudsters use in investment-related romance scams and points out things you can do to protect yourself from these schemes. To find out more, click the title to download a copy of this alert.
Are You an Informed Investor? Reassigned Investment Accounts
The relationship you have with your financial adviser is a key element to meeting your long-term financial goals. If your stockbroker or investment adviser leaves his or her employer, you should make sure that you understand how and why it happened. It could be as simple as a move to another city or retirement, but there could be other reasons too. It is critical to find out what happened before deciding who will help you with your investments going forward. After all, it’s your money and your future that is at stake. To find out more, click the title to download a copy of this alert.
Are You an Informed Investor? Bank to the Future: Decentralized Finance (DeFi) Defined
Decentralized finance, or DeFi, is a relatively new blockchain-based set of financial services gaining popularity and acceptance. This alert discusses DeFi, the technology behind it, and how you can protect yourself from falling victim to a scam. Click the title to download the alert.
Are You an Informed Investor? Expense Ratios
Mutual funds and exchange traded funds (ETFs) offer investors a cost-efficient way to invest in professionally managed portfolios of securities. While it is often tempting to make a purchase based on a fund’s historical performance, informed investors know that past performance is no guarantee of future performance, and that they must review a fund’s prospectus, shareholder reports and portfolio holdings to see if the fund’s risk/return profile aligns with theirs. An informed investor will pay particular attention to a fund’s expense ratio, which, over time, can eat into a fund’s earnings significantly. Click the title to download a copy of this alert.
Are You an Informed Investor? ESG Investing
As climate change and social concerns have grown in recent years, many investors are becoming more conscious of whether a company in which they are investing has considered environmental, social and governance (ESG) factors. This is resulting in an investor-driven push to get corporate managers to pay greater attention to ESG issues. Some corporations are responding by altering their management philosophies and business plans. Click the title to download a copy of this advisory.
Are You an Informed Investor? Social Media, Online Trading and Investing
In our digitally connected world, some investors turn to online chatrooms and social media platforms for information about investing or specific investment opportunities. Phone apps can turn even the most casual investor into a day trader, and online investment chat forums make it easy to use these sources for investment advice rather than using the services of a registered investment adviser. While ever-evolving technology makes investing more accessible to greater numbers of people, the informed investor knows that technological democratization also brings significant risk. Click the title to download a copy to better understand how to protect yourself when using these online tools.
Are You an Informed Investor? Protecting Online Accounts
As financial technology has evolved, it has given consumers the ability to shop, save, and invest online using their phones, tablets, and computers. These modern financial conveniences, however, come with risk. Scammers always look for new ways to get into a consumer’s pocketbook, electronically or otherwise. Investors should be cautious in the way they use the conveniences offered by new and evolving financial technology, especially as they’ve become more widely used during the COVID-19 pandemic. A bit of caution can keep virtual distance between scammers and your money. Click the title to download a copy to better understand how to protect your online accounts.
Are You an Informed Investor? Private Placement Offerings
The COVID-19 pandemic has caused significant disruption and anxiety to individuals and the financial markets. Because fraudsters often try to capitalize on current issues and problems to promote their scams, the North Carolina Securities Division is issuing this updated investor alert (published originally in 2013) on exempt securities offerings, also known as “private placements,” in light of the coronavirus pandemic. Click the title to download a copy to help you better understand what to look for when considering private placement offerings.
Are You an Informed Investor? Be Wary of Bond Ratings
Bonds are part of many investors' portfolios, held either as individual securities or through funds (such as mutual funds). A key consideration for bond investments is the rating given to a bond by a nationally recognized bond rating company. Investors consider these ratings in evaluating possible investments, but it is important to look beyond the mere rating when considering an investment in a specific bond or bond fund portfolio. Click the title to download a copy to help you better understand what to look for when considering investing in bonds.
Are You an Informed Investor? How Blind Trust Can Break the Bank
Affinity fraud occurs every day at places of worship, in tight-knit ethnic or immigrant communities, at country clubs, in professional organizations, in online forums, and anywhere that people gather around a shared belief, interest, or goal. That shared interest – the reason a group gathers in whatever form it does – creates camaraderie and trust among the members. Fraudsters join these groups and use the trust they build to convince members to invest in investment schemes or phony business projects to line their own pockets, leaving investors broke. Click the title to download a copy to help you better understand how fraudsters exploit the trust that exists among members of a group.
Are You an Informed Investor? Contracts for Difference
A contract for difference (CFD) is offered as an alternative to traditional financial instruments used to speculate on financial markets. These types of investments generally are available only to very high net worth individuals or institutional investors. CFDs may be marketed to retail investors by scammers looking to make a quick profit. Click the title to download a copy to help you better understand these investments and their risks.
Are You an Informed Investor? Opportunity Zones
Opportunity zones encourage longer-term investments in low-income U.S. communities by providing certain tax benefits to investors. Investors may be attracted to opportunity zone investments for the potential tax benefits and promise of return on investment. Investors should weigh various factors before deciding to invest. Just because an investment is available in an opportunity zone does not automatically make it right for you. Click the title to download a copy to help you better understand these investments and their risks.
Are You an Informed Investor? Initial Loan Procurements: Where Crowdfunding Meets Blockchain
Companies using blockchain technology need to raise capital just like any other company. One way these companies accomplish that is through initial coin offerings (ICOs), which require the new company to create tokens that can be sold to investors and used for the development of new projects. An alternative fundraising method is catching the interest of investors. Initial loan procurements allow companies to raise capital without the added burden of creating tokens. Click the title to download a copy to help you better understand these investments and their risks.
Are You an Informed Investor? Cross-Selling
Cross-selling by banks and investment firms is a growing concern for securities regulators. At its best, this is a way for banks or investment firms to inform clients about the range of financial products and services available. At its worst, this common sales technique can take advantage of loyal clients. Click the title to download a copy to help you better understand how to recognize this sales technique so you get only those services or products you want and nothing else.
Are You an Informed Investor? Robo-Advisers
Investors are increasingly turning to robo-advisers to help them manage their portfolios. Easy-to-use smartphone apps and online portals make setting up an account with a robo-adviser convenient and quick, which is contributing to their increasing popularity. For those considering a robo-adviser, it is best to take it slow and ensure this type of service meets your short- and long-term investing needs.
Are You an Informed Investor? Promissory Notes
Unscrupulous individuals sell bogus promissory notes to unsuspecting retail investors and promissory note schemes continue as a leading source of investor complaints. Members of the North American Securities Administrators Association (NASAA) recently reported 210 new investigations involving promissory notes, which led to 149 formal enforcement actions by state securities regulators last year. Before parting with your hard-earned money, make sure you know what you’re getting into. Click the title to download a copy to help you better understand these investments and their risks.
Are You an Informed Investor? Marijuana-Related Investments: Greener Pastures or Just Another Scam?
You know the pitch – “Don’t miss out on this once-in-a-lifetime investment opportunity with greener pastures right on the horizon!” Investments in budding marijuana business ventures are becoming more prevalent and are receiving increased media coverage. Scammers are using the media buzz to convince investors to hand over money for risky or outright fraudulent marijuana ventures that go up in smoke, along with investors’ money. Before parting with your hard-earned money, make sure you know what you’re getting into. Click the title to download a copy to help you better understand these investments and their risks.
Are You an Informed Investor? Escheatment: Do You Have Unclaimed Property Sitting with the Government?
Escheatment is a process whereby the government takes ownership of property, including financial assets, that has been deemed abandoned by the property’s rightful owner. Escheatment of financial accounts typically occurs after a period of account-related dormancy (or “inactivity”) and after attempts to identify and contact the account owners have failed. Download this alert to learn how you can prevent your financial accounts from being escheated.
Are You an Informed Investor? What to Know about ICOs
Initial Coin Offerings (ICOs) are attracting investors interested in new trends in technology investing. Regulation of ICOs is evolving and complex. With considerably fewer investor protections than in traditional securities markets, investors considering participating in an ICO investment should be aware of the growing potential for fraud and manipulation these offerings present. Investors need to approach ICOs with extreme caution. ICOs are very risky and are not suitable for many investors. You could lose all of your investment. Before parting with your hard-earned money, make sure you know what you’re getting into. Click the title to download a copy to help you better understand these investments and their risks.
Are You an Informed Investor? Be Cautious of the Crypto Investment Craze
Before you jump into the crypto craze, be mindful that cryptocurrencies and related financial products may be nothing more than public facing fronts for Ponzi schemes and other frauds. And because these products do not fall neatly into the existing federal/state regulatory framework, it may be easier for the promoters of these products to fleece you. Investing in cryptocurrencies and related financial products accordingly should be seen for what it is: extremely risky speculation with a high risk of loss. Click the title to download a copy of this investor alert to help you better understand these investments and their risks.
INFORMED INVESTOR ADVISORY: Are Unicorns a Myth?
Unicorns are not just the stuff of fairy tales; some financial unicorns exist today. But investing in unicorns is speculative, and generally is unavailable to retail investors. Retail investors looking to bet on a unicorn may be able to do so indirectly through a mutual fund, exchange-traded fund or business development company. But beware; investing in unicorns is risky. This investment may bite. Click the title to download a copy of this investor alert to help you better understand these investments and their risks.
Are You an Informed Investor? Online Binary Options Schemes
A binary option is a type of all-or-nothing investment contract, similar to placing a bet. Like the flip of a coin, there are only two possible outcomes: heads you win or tails you lose. This advisory discusses common investor complaints and offers common tactics and warning signs of schemes related to binary options, including: unsolicited investment offers; high-pressure sales tactics; personal information requests; and a lack of information about the offering firm or its management. Download a copy of this investor alert to help you better understand to learn how to avoid becoming victimized.
Are You an Informed Investor? EB-5 Fraud: Immigrant Investors Beware
In an effort to stimulate the U.S. economy through job creation and capital investment by foreign investors, he U.S. Congress in the early 1990s authorized the creation of a new type of immigrant visa known as the Employment-Based, Fifth Preference (EB-5) visa. Under the EB - 5 program, foreign investors who meet certain eligibility requirements can apply for conditional resident alien status(i.e., a conditional “green card”) in the United States by investing in the American economy.Unfortunately, fraudsters have preyed upon unsuspecting EB - 5 investors, through the use of illegitimate businesses. Download a copy of this investor alert to help you better understand to learn how to avoid becoming victimized a second time.
Are You an Informed Investor? Third-Party Asset Recovery Companies
Victims of investment scams are wise to use caution if approached by companies promising to help them recover their lost investment funds and bring the perpetrators to “justice.” A third-party asset recovery company is a company that charges a fee to assist individuals in recovering money lost in scams. The company claims to gather information on the scam and assist the individual in recovering lost investment dollars. Many of these self-proclaimed recovery companies are not law firms, although they may advertise that they can provide legal assistance. Typically, the targeted investors have lost thousands of dollars, perhaps even their entire life’s savings, to fraudulent investment schemes. Download a copy of this two-page investor alert to help you better understand to learn how to avoid becoming victimized a second time.
Are You an Informed Investor? The Next Big Thing
At first glance, marijuana, binary options, and digital currency appear to have no real connection to one another. But what they all have in common is their recent emergence as three investments that both sellers and buyers hope will become the “next big thing.” Before you consider investing, download a copy of this two-page investor alert to help you make sure you understand what these products are, their benefits, and their risks.
Are You an Informed Investor? Pension Advance Scams: Retirees Beware
A pension is a type of retirement plan, usually tax-exempt, in which an employee makes contributions toward a pool of funds set aside for an employee’s future benefit. The pool of funds is invested on the employee’s behalf, allowing the employee to receive benefits upon retirement. Are you earning a pension from your employer and need cash fast? Are you an investor looking for new ways to grow your investment dollars? If you answer yes to either question, you may be the target of a new wrinkle on an old type of scam. Download a copy of this two-page investor alert to help you better understand how this scam works and what you can do to protect yourself.
Are You an Informed Investor? Understanding Broker-Dealer Fees
Savvy consumers know it is important to compare prices on similar products to get the best value for their money. Wouldn’t it be nice if the same were true when shopping for a broker-dealer firm to handle your investments? Broker-dealer firms must disclose all fees to customers; however, brokerage firms are largely free to decide for themselves how to do this. Until fee disclosures are more consistent and transparent, the burden falls to the investor to understand all the fees. Download a copy of this two-page investor alert to help you better understand the fees you are being charged to determine if you are getting the best value for the services being provided.
Are You an Informed Investor? Cybersecurity
The list of financial institutions targeted by organized cyber attacks continues to grow with ever-increasing frequency. Since investors are encouraged to take steps to ensure their own personal systems are updated with the latest anti-virus and anti-malware software, and to follow proper account password safety protocol. Download a copy.
NASAA Advisory -- Third Party Custodians (NC version)
While self-directed IRAs can be a safe way to invest retirement funds, investors should understand that third-party custodians have limited duties to investors. Download a copy of this two-page investor alert to learn the fictions and facts about third-party custodians of self-directed IRAs and other qualified plans.
Are You an Informed Investor? High-Yield Investment Programs
Have you ever seen an ad on the Internet or a posting on a social media site promising too-good-to-be-true rates of return in short periods of time? Then you may have encountered an advertisement for a high-yield investment program, sometimes referred to as an HYIP. Download a copy of this two-page investor alert to learn more about this type of Ponzi scheme and how you can protect yourself from fraud.
Virtual currencies, which includes digital and crypto-currency, are gaining in both popularity and controversy. Thousands of merchants, businesses and other organizations currently accept Bitcoin, one example of crypto-currency, in lieu of traditional currency. Two attractive characteristics of virtual currency are lower transaction fees and greater anonymity. However, virtual currency is not without risk. Download a copy of this two-page investor alert to learn more about virtual currency and how you can protect your e-wallet.
SEC-NASAA Investor Bulletin: Making Sense of Financial Professional Titles
The Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy and the North American Securities Administrators Association (NASAA) are jointly issuing this Investor Bulletin to help investors better understand the titles used by financial professionals. The requirements for obtaining and using these titles vary widely, from rigorous to nothing at all. To use certain titles, a financial professional may need to pass exams, meet ethical standards, have relevant work experience, and undertake continuing education. Other titles, however, may be obtained with little time, effort, and experience. Download PDF (This booklet is not available for order.)
NASAA -- Cutting Through the Confusion
This 7-page booklet provides practical guidance about how consumers should go about selecting a financial advisor to assist them with their investments. It offers a clear, common sense discussion of the key differences between brokers, investment advisers and financial planners. This booklet is the result of a collaborative effort between the North American Securities Administrators Association, Investment Adviser Association, CFA Institute and the Financial Planning Coalition, which is comprised of Certified Financial Planner Board of Standards, the Financial Planning Association and the National Association of Personal Financial Advisors. Download PDF (This booklet is not available for order.)
Are You an Informed Investor? Energy Investments
With energy demands and a desire for energy independence increasing globally, investments in traditional and alternative energy resources are being promoted more often and are becoming attractive to investors. Some examples include: wind turbines, solar panels, biodiesel, ethanol, coal, oil, gas, hydrogen, wave, geothermal, oil sands, and liquefied natural gas. These investments are highly risky and are not appropriate for all investors. It is not unusual for unscrupulous promoters to follow the headlines and take advantage of unsuspecting investors by engaging in fraudulent practices. Download a copy of this two-page investor alert to learn more about energy investments and how you can protect yourself from fraud.
Are You an Informed Investor? Financial Service Providers
Whether you are just starting a retirement fund or need additional help with growing and managing your money, you may benefit from selecting an investment services professional. Finding a person who is knowledgeable, affordable, and trustworthy may be a challenging process. This advisory provides basic information on three types of investment services professionals and their obligations to you as a client: broker-dealer agents, investment adviser representatives, and financial planners. An individual professional can hold any of these three credentials or titles, among others. Download a copy of this two-page investor alert to learn more about financial service providers and how you can protect yourself from fraud.
Are You an Informed Investor? Crowdfunding
The Internet has become an inexpensive and easy way for individuals and businesses to raise money for their activities. Federal and state law now permit start-up companies to find investors using the Internet. Investors should be on the lookout for unscrupulous issuers and intermediaries who may attempt to misuse crowdfunding to steal from investors through false and misleading representations. Download a copy of this two-page investor alert to learn more about crowdfunding and how you can protect yourself from fraud.
Small Business Advisory: Crowdfunding
Under federal and state law, it is now possible for entrepreneurs to raise capital by offering to sell interests in their businesses over the Internet. However, federal and state crowdfunding laws place limitations on how and to whom a small business can sell its securities. Download a copy of this advisory to learn what every business owner should know to determine if crowdfunding is right for you and your business.
Clinicians Pocket Guide on Elder Investment Fraud and Financial Exploitation
This easy-to-use pocket guide provides doctors with a checklist of things to look for which might indicate a patient is vulnerable to elder financial abuse. A list of potential questions doctors might ask their patients is included as are referral resources. A "MUST HAVE" for practices with elderly patients. Download a copy of this pocket guide.
Patient Education Brochure - Elder Investment Fraud and Financial Exploitation
Download a copy of this free patient brochure detailing the signs of potential elder financial abuse which medical professionals and senior advocates may display in their lobbies or make available to clients, patients or their patients' caregivers.
Are You an Informed Investor? Social Networking
Social networking allows people to connect to one another quickly and easily. But it also allows con artists to find potential victims more quickly. What are the red flags of an online investment scheme? Download a copy of this two-page investor alert to learn how you can protect yourself from fraud in social networking.
Are You an Informed Investor? Exchange Traded Funds
Exchange Traded Funds (ETFs) have grown increasingly popular among retail investors. But what are ETFs? What are the risks associated with ETFs and are they suitable for you? Download a copy of this two-page investor alert about ETFs.
Are You an Informed Investor? Derivatives
Do you know what derivatives are? Before you invest in these complex financial products, Download a copy of this two-page investor alert that explains some of the more common types of derivatives.
Are You an Informed Investor? Gold
Do you think gold is a safe investment? The answer might surprise you. Download a copy of this two-page investor alert that lists ten issues to consider before you make a gold-related investment.
Are You an Informed Investor? Peer-to-Peer Lending
Do you know what peer-to-peer lending is? How safe is it? How does it work? Who regulates peer-to-peer lending? To learn more, download a copy of this two-page investor alert that explains this emerging online financial service.
NASAA -- A Century of Investor Protection (1911-2011)
Financial Field Manual: The Personal Finance Guide for Military Families
Five Keys to Investing Success
Getting Help With Your Investments
Mutual Funds and ETFs: Maybe All You'll Ever Need
The Basics for Investing in Stocks
A Primer for Investing in Bonds
Baby Boomers Beware
Securities Division Informational Sheet
Fighting Fraud 101
A Salute To Smart Investing
Safe Investing Guide
Understanding Your Brokerage Account Statements (En Esponal)
Understanding Your Brokerage Account Statements (English)
Maximize Your Retirement Investments
Where To Invest Your College Money
Resolving Problems With Securities Firms
Investment Terminology: Words To Earn By
Internet Fraud And Abuse
Choosing A Stockbroker
Ten Do's And Don'ts for Investors
Frauds Aimed at Senior Citizens