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Be Wary of High-Pressure Sales Calls from Brokers

David P. Meyer, Esq.

Brokers have been known to cold call potential investors to persuade them to invest in securities. Often, these securities are speculative. A broker might allude that immediate action has to be taken to avoid missing out on a limited opportunity or a claim may be made that the broker possesses inside information. You need to understand that these are high-pressure sales tactics that some brokers use to get more business.

If a broker is trying to convince you to make an investment through an unsolicited phone call, you need to be wary. Ask for the broker’s CRD number, so that you can look into his or her background through FINRA’s BrokerCheck or through your state securities regulator and check to see if any complaints have been filed by other customers.

Do not send money to a brokerage firm or broker after receiving an unsolicited phone call, as you stand to lose your money. If you want to move forward with a broker who has cold called you, it would be prudent to meet in person, specifically at the brokerage firm. Before making an investment with the broker, also make sure you read and understand written material about the particular investment.