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SEC Warns BP Payout Recipients to Watch Out for Investment Fraud

David P. Meyer, Esq.

According to a recently released SEC Investor Alert, recipients of lump sum payouts from BP need to be aware of investment scams that are designed to take advantage of individuals who have been given highly publicized payouts. Small businesses should also be on the alert.

Investment scams targeting payout recipients often involve promises of high returns and little risk. Sometimes the scams involve complex investment strategies that are designed to be difficult or impossible to understand. Similar scams were plentiful after Hurricane Katrina and targeted people who had recently compensation from insurance companies.

SEC Chairman Mary L. Schapiro was quoted in an Oct. 13 press release discussing the scams. "We have seen firsthand how recipients of highly publicized payouts can become targets for investment fraud," she said. "In addition to our education efforts, we are on the lookout for any securities scams in the Gulf area attempting to defraud individuals, families, and businesses who already are financially strapped."

The SEC's alert includes a list of resources that payout recipients can utilize to assist them in deciding how to best manage the money. For additional information on investing wisely, contact the SEC Office of Investor Education and Advocacy by calling (202) 551-6318 or e-mail LibraryOutreach@sec.gov.

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