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Be cautious when making investments

Tips can help you make right choices, avoid fraud

By John Dayberry | Hickory Daily Record

Published: November 11, 2008

HICKORY - News that a Catawba County man was charged last week with securities fraud has many investors on edge about how to protect their investments.

J.V. Huffman Jr., 44, of Claremont, was charged Friday on the securities fraud counts in cases involving four investors who invested $634,000, according to the North Carolina Secretary of State's Department. The department is investigating Huffman and his company, Biltmore Financial Group.

Officials said Monday more charges are possible.

An international organization devoted to investor protection warns that investors must be especially cautious in times of financial turmoil.

"Because there are those who will try to prey on the investing public in times of confusion, fear and uncertainty, investors should resist the temptation to make uninformed and hasty decisions about their investments," said Fred Joseph, president of the North American Securities Administrators Association.

The voluntary association, whose membership consists of 67 state, provincial and territorial securities administrators in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Canada and Mexico, is designed to protect consumers who purchase securities or investment advice.

NASAA offers the following tips to help investors with questions about their long-term investments.

• Contact your state securities regulator with any questions about an investment firm, professional or product.

Be certain that both the seller and investment are licensed and registered. If they are not, they may be operating illegally.

In North Carolina, contact David Massey, deputy securities administrator, Secretary of State, Securities Division, P.O. Box 29622, Raleigh, NC 27626-0622; phone (919) 733-3924; or visit www.secretary.state.nc.us/sec/

• Use common sense. Some things really are too good to be true. Get a professional, trusted third-party opinion when presented with investment opportunities that seem to offer unusually high returns in comparison to other investment options.

• Request written information that fully explains the investment, such as a prospectus or offering circular. The documentation should contain enough clear and accurate information to allow you or your financial adviser to evaluate and verify the particulars of the investment.

• If you participate in an employer-sponsored retirement plan, such as a 401(k) plan, get unbiased advice and guidance before making any significant changes to your long-term savings and investment strategy.

Katherine Newton, a certified financial planner in Hickory, said it is important that people in search of a financial adviser check to make sure the person has several years of experience, is licensed, comes recommended by others or is happy to give references, and has attained some credential or certification such as certified financial planner or chartered financial consultant.

She recommends visiting the Financial Industry Regulatory Authority's Web site (www.finra.org) to do a quick "broker check" on the person's professional background.