What measures can be taken to protect investors from potential fraud?

Investors in Washington need to exercise caution when making alternative investments to protect themselves from fraud. The Washington Department of Financial Institutions (DFI) recommends that investors research any potential investment and its promoters thoroughly, before proceeding. It is important for investors to always verify the background and registration of any business or person offering the investment. Investors should contact the DFI to check if the business or person is registered or licensed to offer securities in Washington. In addition, investors should always ask for and read the offering materials, such as the prospectus, private placement memorandum, and subscription agreement, closely. This will help investors understand the investment and its potential risks. Another measure investors can take is to consult a seasoned financial advisor or attorney before investing. This will help them better understand the terms of the investment, as well as any protections or guarantees provided by the promoter. Finally, investors should remember to never make investments based on the recommendation of a stranger or someone they know only through email. It is important to always rely on researching the facts and speaking directly with the promoter or their representative. By following these measures, investors in Washington can better protect themselves from potential fraud when making alternative investments.

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What measures can be taken to protect investors from potential fraud?

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