Verify Those Fancy Credentials

Otherwise, they might lead you to feelings of regret.

Don’t trust someone to manage your investments just because he or she claims to have impressive credentials or experience — or manages to create a “buzz of success.”

That’s the latest investor alert from the Securities and Exchange Commission, which announced two fraud cases against advisors who made false claims about their experience and industry accolades in attempts to gain investors’ trust.

Investors themselves sometimes unintentionally contribute to a fraudster’s false reputation of success by repeating to others the misrepresentations made to them, the SEC says.

In one of the two fraud cases, a Pennsylvania man claimed he was named a “Top 25 Rising Business Star” by Fortune magazine while soliciting investors for a private fund. No such distinction exists at Fortune. The con artist also exaggerated his past investment performance and inflated the fund’s projected performance. He was fined $25,000 and consented to an order requiring him to refrain from offering or selling certain securities for five years and to refrain from associating with any broker, dealer or advisor for five years.

In the other case, a Delaware man falsely claimed to have a college degree from the University of Maryland and touted his appearances on cable news programs while soliciting investors to purchase promissory notes issued by his unregistered advisory firm. He didn’t pay investors the returns he promised.

He was fined $65,000 plus interest and consented to an order barring him from associating with any broker, dealer or advisor or serving as an officer or director of a public company.

We’re proud of the records of our financial planners at Edelman Financial. If your parents are using a different advisor, you can make sure they’re not falling for schemes such as those described above. Simply visit “Ask and Check” at, operated by the SEC, or go to FINRA’s online Broker Check at Both sites let you learn about the regulatory record of your parents’ advisor and the firm he or she works for.

Originally published in Inside Personal Finance September 2015

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