Protection From Investment Fraud: Who’s Got Your Back?

These Resources Will Help You Avoid a Shady Investment

A company claims to hold third-party real estate loans that promise to generate high interest. In return for their money, investors will be given a promissory note reflecting the loan. The offer is marketed as conservative and ‘low risk.’ Sound like a good investment?

For more than 8,000 investors, this seemingly safe investment turned out to be a $1.3 billion Ponzi scheme orchestrated by Woodbridge founder Robert Shapiro. Investors, many of whom were senior citizens, soon learned that their money was being used to pay previous investors, and many of the real estate properties associated with the loans didn’t even exist.

Unfortunately, stories like this still happen far too often. In 2024, consumers lost $5.7 billion to investment fraud — the greatest loss in any category for fraud, and a 24% increase on the previous year.

The smart investor is always on guard against potential investment fraud. Thorough due diligence is the best way to prevent yourself from falling prey to unscrupulous or deceptive investment opportunities, but you don’t have to go it alone.

If you run across something that looks like a scam, seems too good to be true, or just doesn’t look right, consider the following resources.

The North American Securities Administrators Association

The North American Securities Administrators Association (NASSA) is a voluntary association of securities regulators in the US, Canada, and Mexico. NASSA’s fundamental mission is to protect investors from investment fraud and abuse. It provides guidance and standards for a wide variety of issuers and intermediaries who offer and sell securities to the public.

Here, you’ll find resources designed to educate and inform investors, including:

• Investor education content, fraud alerts, and tips.
• Legislative, regulatory, and legal news.
• Publications, speeches, and reports.

The Federal Trade Commission

The Federal Trade Commission (FTC) is a federal agency with jurisdiction in consumer protection and competition across broad sectors of the economy. Its mission is to protect the public from deceptive or unfair business practices and unfair competition through law enforcement, advocacy, research, and education.

You’ll also find resources for protecting consumers and investors, including:

• Reportfraud.ftc.gov, where consumers can report frauds, scams, and bad business practices.
• Forms to file complaints on anti-trust or anti-competitive activity.
• Cases, policy, education, advice, and guidance.
• Fraud news, events, and publications.

The Federal Bureau of Investigation

The FBI investigates a gamut of crimes, including terrorism, counterintelligence, public corruption, civil rights, organized crime, violent crimes, and major theft.

They also investigate an array of white-collar crimes (or, as the FBI calls it, ‘lying, cheating, and stealing’), including:

• Antitrust
• Mass marketing fraud
• Money laundering
• Mortgage and financial institution fraud
• Piracy/Intellectual property theft
• Securities and commodities fraud

Here, you’ll find resources on:

• Reporting platforms for fraud issues.
• Education on business and investment fraud, including fraud awareness and prevention tips and typical fraud schemes.
• A ‘most wanted’ list.

US Securities and Exchange Commission

The Securities and Exchange Commission (SEC) was formed during the Great Depression. Following the stock market crash of 1929, it was clear that there was a need to regulate the stock market and protect consumers moving forward.

The SEC protects investors by enforcing federal securities laws that ensure companies that sell and trade securities will treat their investors fairly and honestly.  Public companies and broker-dealers must file periodic financial statements and disclosures. Investors can also make complaints about a financial professional or firm, which can lead to legal proceedings following an investigation.

Here, you’ll find resources including:

• An Investor Complaint Form, which investors can file against brokerage firms, investment advisers, etc.
• Regulations, cases, filings, rules, and education.
• A company filing search.

The Financial Industry Regulatory Authority

The Financial Industry Regulatory Authority (FINRA) is an independent, self-regulatory organization that serves to ensure the securities industry operates fairly and honestly. They enforce high ethical standards and set various requirements that all brokerage firms are required to meet.  FINRA also offers the largest dispute resolution forum in the US, helping to settle securities-related disputes through arbitration and mediation.

Here you’ll find:

• The FINRA Investor Education Foundation.
• BrokerCheck to search for information on a specific broker.
• The Market Data Center for investment and market research.
• A Fund Analyzer with information on thousands of mutual funds and ETFs, among others.
• A Scam Meter for investors to explore if their potential investment may be fraudulent.

Securities Investor Protection Corporation

The Securities Investor Protection Corporation (SIPC) oversees the liquidation of its member brokerage firms when they fall into bankruptcy or financial trouble and customer assets are missing. The SIPC’s key focus is on restoring cash and securities for investors when their brokerage firm goes out of business. Since 1971, the SIPC has overseen 330 liquidation proceedings and distributed more than $141 billion to over 770,000 investors.

As of 2025, the SIPC hasn’t handled any new brokerage failure cases since 2017. In recent years, it has worked on the recovery of funds for the victims of Bernie Madoff’s Ponzi scheme as an ongoing case.

It is important to understand that the SIPC has no regulatory or enforcement power. It is ultimately guided by regulators as to when a brokerage firm is in financial trouble and customers need protecting. As such, the first step they recommend is still to file complaints with FINRA and the SEC.

Protect Yourself From Investment Fraud

Investment fraud can be an extremely painful and financially damaging experience that can happen even to savvy investors. Arm yourself with the knowledge of which organizations are out there to protect your interests.

Some agencies are vested with legal authority to help you recover your funds if you’ve already fallen victim, while others provide excellent educational resources to help you identify shady firms or products. By staying informed and using the tools available, you can better protect your finances against less scrupulous actors.

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[Editors’ Note: To learn more about this and related topics, you may want to attend the following on-demand webinars (which you can view at your leisure, and each includes a comprehensive customer PowerPoint about the topic):

1. Corporate & Regulatory Compliance Boot Camp: Securities Law Compliance
2. Bad Debtor Owes Me Money!
3. Securities Law Made Simple (Not Really): Private Offering Exemptions and Private Placements

This article was originally published on August 26, 2014 and updated on August 1, 2023. This article was most recently updated by the Financial Poise Editors.]

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