National Survey: Quarter Of College Educated Investors Have Not Heard of Madoff Fraud
-- Survey also suggests younger investors are more at risk --
BRENTWOOD, Tenn., May 15, 2014 /PRNewswire/ -- Over a quarter of individuals with a college education who invest in the stock market are not able to identify Bernard L. Madoff Investment Securities LLC as the perpetrator of a stock market fraud (27%). However, those same investors believe there should be increased regulatory oversight in the financial services space. These are the key findings of a recent survey by Confirmation.com, a cloud-based provider of secure online audit confirmation services.
Roughly one-third of respondents between the ages of 30-44 could not identify the Madoff fraud (66 percent did). Almost half of respondents between ages 18-29 could not make the identification either (56 percent did). Nearly a third of those between 45-60 failed to identify Madoff (71 percent did). Those over the age of 60 showed greater awareness, with 80 percent of respondents identifying Madoff.
"The Madoff fraud should be on the mind of every investor. Clearly, there needs to be a greater sense of awareness, so that frauds of this scale can be prevented in the future," said Brian Fox, president of Confirmation.com. "The irony is that investors want and deserve more protection of their investments. That's a commendable goal, but without basic education, these investors will still be at risk, even with stronger protections in place."
The Confirmation.com survey also found that 80% of investors believe that all companies listed on a U.S. stock exchange should have the same amount of regulatory oversight. A significant share, 89% believe that regulators should have equal access to inspect all companies on a U.S. stock exchange. Fourteen percent of respondents incorrectly believe that "stocks and bonds" are covered by FDIC insurance.
"There are many foreign-based companies listed on U.S. stock exchanges that are not subject to the same regulatory scrutiny as U.S.-based companies," said Mr. Fox, a former national auditor who is also an adjunct professor at Vanderbilt University. "Chinese companies are allowed to be listed on U.S. stock exchanges even though the SEC and PCAOB are barred by the Chinese government from having the same level of oversight as they do for all other companies listed on a U.S. stock exchange. There have been several frauds discovered at such Chinese listed companies because they are not held to the same regulatory standards as U.S.-based listed companies."
Seventy-one percent of respondents said there should be no minimum for the SEC to investigate an investment fraud.
"Given the reality that the SEC is loath to investigate frauds under $1 million based on resources, investors are keen on oversight that does not exist," added Mr. Fox. "Investors need to be diligent and vigilant or another Madoff like fraud will sadly occur."
The online Investor Sentiment & Fraud Vulnerability Survey polled 985 people from a population of college-educated individuals nationally (ages 18+) who invest in the stock market, on sentiment regarding recent frauds and regulatory oversight of the stock market.
A PDF version of the survey data is available upon request.
About Confirmation.com
Confirmation.com is the creator and world's leading provider of secure electronic audit confirmation services. It processes over $1 trillion in confirmation information annually for a majority of public companies, as well as private companies, non-profits and government agencies. In addition to its bank confirmation solution, the company provides solutions for more than 40 different types of audit confirmations including accounts receivable confirmations. Confirmation.com is the Preferred Provider of Electronic Confirmations for the AICPA Trusted Business Advisor™ Solutions Program and is endorsed by the American Bankers Association. Confirmation.com has also received numerous awards including being a multi-year alumnus on the Inc. 500 list for 2010 and 2011. Several hundred In-Network responding companies including all of the Top 10 banks in the U.S. and over 11,000 accounting firms in more than 100 countries trust Confirmation.com for their audit confirmation needs. For more information, visit Confirmation.com.
SOURCE Confirmation.com
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