What is investment fraud?
Investment fraud, also known as financial fraud or investment scam, is a type of consumer fraud that occurs when someone deceives another person into making an investment in a product, service, or financial vehicle with the intent to make a profit. Investment fraud takes on various forms, such as Ponzi schemes, insider trading, and other forms of misrepresentation. In California, the Department of Business Oversight (DBO) is the authority responsible for protecting citizens from investment fraud. The DBO works to enforce laws that protect consumers from unfair, deceptive, and fraudulent business practices. The aim is to create an investment environment that is free from fraudsters and other bad actors who may attempt to take advantage of unsuspecting investors. For those looking to invest in California, the DBO provides the Investment Adviser (IA) registration process. This process requires those who are offering investment advice to register with the state and pass a background check. This additional security measure helps ensure that consumers are protected when investing. The DBO also offers InvestRight, a website devoted to providing investors with education and resources on how to protect themselves from investment scams. Along with an online investor awareness program, InvestRight also offers free resources, such as newsletters and brochures, that provide more detailed information about investing and how to detect and avoid investment fraud. By taking advantage of these resources, consumers can be better informed and knowledgeable about investment fraud and how to protect themselves from it.
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