A Low Cost Background Check Would Have Saved Madoff Investors Billions
SACRAMENTO, Calif., June 22 /PRNewswire/ -- It has been well documented that 11,000 individuals, families, and institutions lost more than $50 billion when they invested in Bernie Madoff's illegal Ponzi scheme. His victims could have avoided these massive losses if they had spent a few hundred dollars on a background check that would have uncovered negative information about Madoff and his companies.
Jack Waymire, founder of Paladin Registry (http://www.PaladinRegistry.com) and author of Who's Watching Your Money? The 17 Paladin Principles for Selecting a Financial Advisor (ISBN 0471476994) said, "Investors should not expect regulators such as the SEC, FINRA, and State Securities Commissioners to protect them from investment scams and the criminals who sell them. They do not have the resources to track all of the legitimate and illegitimate companies and sales representatives who market legal and illegal investment products. The bottom-line is investors have to take more responsibility for their financial well-being."
Investors can conduct their own background checks by viewing public data at FINRA.org and SEC.gov. However, 95% do not view advisor data because it is complex and time consuming. Instead, they accept what they are told and hope it is the truth. When investors do not validate advisor information, they dramatically increase their risk of being impacted by bad advice, bad financial products, and illegal investment scams.
If investors are not going to commit time validating the credentials and ethics of financial advisors, they should use the services of an experienced third party to do the work for them. Experts know what to look for when they research advisor data that describes their competence, ethics, and business practices.
Madoff will spend the rest of his life in prison. However, that doesn't help his 11,000 victims. More than 90% of their assets are gone forever. It pays to remember, no matter how personable the advisor, how slick the presentation, how big the advisors' firms, or how positive the references, investors should always require background checks before they turn their assets over to third parties.
ABOUT PALADIN REGISTRY
In 2003, Paladin began providing information services to investors who use the services of financial planners and financial advisors. Paladin services include Background Checks, Quality Ratings, Online Documentation, and a service that matches investors to pre-screened financial professionals in their communities. Visit Paladin's website for additional information.
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SOURCE Paladin Registry