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SEC Commissioner Doles Out Advice to UCSD
Retirees
Ioana Patringenaru | March 12, 2007
Do your homework. Diversify. Don’t panic.
These were some of the pieces of advice that Paul
Atkins, a Commissioner with the Securities and Exchange
Commission, gave to an audience of UCSD retirees Tuesday
at the Faculty Club.
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| Securities and Exchange
Commissioner Paul Atkins |
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The recently volatility in the markets is a good
reminder that investors should diversify their portfolios
and invest long term, Atkins said after his talk.
“You can’t treat investments like a bank
account,” he said.
During his talk, Atkins led his audience on a somewhat frightening and vertigo-inducing tour of equities fraud and Internet scams. He started with a clip from the movie “Boiler Room,” which shows a broker, who works at a fly-by-night firm, trying to convince a potential client to buy stocks over the phone.
“This happens all the time,” Atkins said, adding he’s received similar calls at his desk at the SEC. “This is a big problem and we’re out there trying to find people like that.”
Consumers’ best defense against people like the “Boiler Room” broker is information, he added. First, ask questions, Atkins advised. “It’s your money, no question is too dumb to ask,” he said. Ask your broker how much he’s making on his trades, Atkins said. Check out their background on the Internet. Check out performance reports for publicly traded companies. Read up on the funds, in which you’re investing, and look for hidden fees and up-front costs, which will diminish return on your investment, Atkins advised. Also, never buy stocks or give out personal information over the phone, he said. Beware of penny stocks. Watch out for “insider” tips and testimonials. “If it sounds too good to be true, it probably is,” he added.
There are a lot of pyramid and Ponzi schemes out there promising returns that are suspiciously high, Atkins said. He cited an office supplies company in Syracuse, N.Y., that booked revenue from the same copier lease seven times. He played a voice mail, in which a caller pretends to leave a hot stock tip for a friend. Then there’s the blizzard of e-mail stock scams. The SEC tries to track all of them down, but many of the e-mails come from overseas, Atkins said. Also, it takes years to investigate small schemes. An SEC investigator just had shut down one of these scams after years of fighting, when organizers started a different scheme, which they named after the investigator, Atkins said.
Atkins was giving several talks in the San Diego area and contacted UCSD to ask if the campus would like to hear from him, said Bob Oakes, president of the UCSD Retirement Association. Oakes said his group jumped on the opportunity, in partnership with the UCSD Emeriti Association.
Atkins’ talk earned good reviews from his audience.
Morton Levy said he enjoyed learning about the SEC’s
focus and priorities. “I thought it was very
informative and interesting,” he added.
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