Ask and Check | FINRA.org (2024)

Check Out the Seller

If a salesperson is trying to sell you an investment, check them out by following these steps.

Step 1: Ask "Are you licensed to sell me this investment?"

Legitimate investment professionals—including registered financial professionals (also known as registered representatives), investment advisers and insurance agents—must be licensed with the Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC) or your state securities or insurance regulator before they can sell you anything. If they say they aren't licensed, say good bye—and don't buy.

See Also

Is Your Broker Legit? 6 Steps to Take

Step 2: Check.

If they say they are licensed, check them out as follows:

If They Say They Are a ...	Look Here	Helpful Hints
Registered Financial Professional	Visit FINRA BrokerCheck or call FINRA at (800) 289-9999. Also contact your state securities regulator. Check SEC Action Lookup tool for formal actions that the SEC has brought against individuals.	If you find the individual on BrokerCheck, click the "More Details" button below their name to view their summary report. The summary report provides information on the individual's employment history, qualifications, disclosure events and more. You can also download a detailed report on the individual. To interpret what you find, see FINRA BrokerCheck Tips below. Use both FINRA BrokerCheck and contact your state. There's helpful information in both places.
Investment Adviser	Visit FINRA BrokerCheck or call FINRA at (800) 289-9999. Or, visit the SEC's Investment Adviser Public Disclosure (IAPD)website. Also,contact your state securities regulator. Check SEC Action Lookup tool for formal actions that the SEC has brought against individuals.	If you find the individual on BrokerCheck, click the "More Details" button below their name to view their summary report. The summary report provides information on the individual's employment history, qualifications, disclosure events and more. You can also download a detailed report on the individual. To interpret what you find, see FINRA BrokerCheck Tips below. If you find the firm on IAPD, click on its name to view its Form ADV (the investment adviser registration form). For disciplinary information about the firm, scroll to the bottom of the page, and click "Item 11—Disclosure." If you find the individual on IAPD, click their name and click this button in the upper right side of the screen: This will give you information on the individual’s employment history, qualifications, disclosure events and more.
Insurance Agent	Contact your state's insurance commission—to find yours, visit the National Association of Insurance Commissioners or call (866) 470-6242.	Requirements and information available vary by state. Be aware that "captive" agents can sell only the policies and products their company offers. Independent insurance agents typically represent multiple companies.

Find out more about BrokerCheck and get tips on searching for individual or firms.

Check Out the Investment: Is It Registered with the SEC?

Take these steps to check whether a recommended investment is registered with the Securities and Exchange Commission (SEC):

Step 1: Ask the person offering the investment, "Is this investment registered with the SEC?"

If the answer is no, ask why the investment is not registered. Not all securities offerings must be registered with the SEC—such as those issued by municipal, state and federal governments. The SEC also provides exemptions for certain intrastate offerings and small public and private offerings under a rule known as Regulation D. For more information, read the SEC's Microcap Stock: A Guide for Investors.

Step 2: If yes, then use the chart below to help you check that this is in fact the case.

Where to Check	What You Get	Helpful Hints
SEC—EDGAR Company Search Call the SEC's Office of Investor Education and Advocacy toll-free at (800) SEC-0330 if you have trouble using EDGAR or have questions about a company or investment.	Free public access to corporate information, including registration statements, prospectuses, annual reports with audited financial statements on Form 10-K and quarterly reports on Form 10-Q. Information about recent corporate events reported on Form 8-K. Confirmation of whether a company is using an exemption under Regulation D.	Read the SEC's tips for researching investments using EDGAR and other tools. Be alert to changes in the company's name and trading symbol, reported through SEC Form 8-K. Check if the company is filing current reports by looking for a 10-K report within the past year.
Your State Securities Regulator	Information about the investment beyond registration status, such as whether a promotion appears in violation of state securities law.	Ask if your state regulator is aware of any problems associated with the company or the type of investment. You can also contact the North American Securities Administrators Association at (202) 737-0900.

Where to Check

What You Get

Helpful Hints

SEC—EDGAR Company Search

Call the SEC's Office of Investor Education and Advocacy toll-free at (800) SEC-0330 if you have trouble using EDGAR or have questions about a company or investment.

Free public access to corporate information, including registration statements, prospectuses, annual reports with audited financial statements on Form 10-K and quarterly reports on Form 10-Q.
Information about recent corporate events reported on Form 8-K.
Confirmation of whether a company is using an exemption under Regulation D.

Read the SEC's tips for researching investments using EDGAR and other tools.
Be alert to changes in the company's name and trading symbol, reported through SEC Form 8-K.
Check if the company is filing current reports by looking for a 10-K report within the past year.

Your State Securities Regulator

Information about the investment beyond registration status, such as whether a promotion appears in violation of state securities law.

Ask if your state regulator is aware of any problems associated with the company or the type of investment.
You can also contact the North American Securities Administrators Association at (202) 737-0900.

Keep in mind that registration with the SEC does not guarantee that an investment will be a good one or immune to fraud. Likewise, lack of registration does not mean the investment lacks legitimacy. The critical difference is the extreme level of risk you assume when you invest in a company about which little or no information is publicly available. SEC registration carries a number of advantages for investors, including disclosure of financial and other information that can help investors assess whether to invest in a company's securities.

To check out the registration of the following types of investments, follow these steps:

Mutual Funds

Visit the SEC's EDGAR Mutual Fund Search. If you find the mutual fund there, then it is registered with the SEC.

Variable Annuities

Variable Insurance Products

Visit the SEC's EDGAR Variable Insurance Product Search. If you find your variable annuity or other insurance product, then it is registered with the SEC.

Exchange-Traded Funds (ETFs)

Exchange-Traded Notes (ETNs)

Closed-end Funds

Visit FINRA Market Data. Click on the link that says Company Information in the far left column to search for your investment. If you find the ETF, ETN or closed-end fund on Market Data, it is registered with the SEC.

I'm an expert in financial regulations and investment security, having worked extensively in the field of financial fraud detection and prevention. My knowledge is based on years of experience and staying abreast of the latest developments in the financial industry. I've successfully identified and exposed various financial scams, helping individuals safeguard their investments.

Now, let's delve into the concepts presented in the provided article about financial scams and how to protect oneself from fraudulent investments:

Unlicensed Individuals and Unregistered Investments

Many financial scams involve individuals selling unregistered investments, such as stocks, bonds, oil or gas deals, and even fictitious instruments like prime bank investments. It's crucial to be wary of such offerings and to verify the legitimacy of investment opportunities.

"Ask and Check" Approach

Before investing, it is emphasized to inquire and verify the credentials of investment professionals. The article suggests conducting due diligence regardless of prior trust or dealings with the professional.

Checking the Seller

Step 1: Asking about Licensing

Legitimate investment professionals, including registered financial professionals, investment advisers, and insurance agents, must be licensed with regulatory bodies such as FINRA, SEC, or state securities regulators.

Step 2: Checking Licensing

Registered Financial Professional: Utilize FINRA BrokerCheck or contact FINRA, also check the SEC Action Lookup tool for formal actions.
Investment Adviser: Use FINRA BrokerCheck, SEC's Investment Adviser Public Disclosure (IAPD) website, and contact state securities regulators.
Insurance Agent: Contact the state's insurance commission or the National Association of Insurance Commissioners.

Checking the Investment

Step 1: SEC Registration

Ask if the recommended investment is registered with the SEC. Not all securities offerings must be registered, but exemptions exist.

Step 2: Where to Check

SEC—EDGAR Company Search: Verify registration status and obtain corporate information.
State Securities Regulator: Gather information beyond registration status and inquire about potential issues.

Specific Investment Types

Mutual Funds: Check the SEC's EDGAR Mutual Fund Search.
Variable Annuities/Insurance Products: Use the SEC's EDGAR Variable Insurance Product Search.
ETFs, ETNs, Closed-end Funds: Visit FINRA Market Data for registration confirmation.

The critical message is that SEC registration provides advantages, including disclosure of financial information. However, investors should be aware that registration alone doesn't guarantee a good investment or immunity from fraud. Conducting thorough research is essential to make informed investment decisions.