New SEC Commissioner Talks Shop: Isaac Hunt Jr. Shares His Views on How to Safeguard Yourself from Securities Fraud

Article excerpt

You might find it hard to believe but the government has your back when it comes to malpractice by stockbrokers and mutual fund managers. In fact, that was the reason behind the Securities Exchange Act of 1933, which created the U.S. Securities and Exchange Commission. This body of five commissioners, appointed by the President on a five-year rotating basis, is responsible for administering congressional acts regarding securities, stock exchanges, investment advisors and public utility holding companies.

The newest SEC commissioner is Isaac Hunt Jr., appointed by President Clinton and confirmed by the Senate this past February. Hunt, who holds a B.A. from Fisk University and an L.L.B. from the University of Virginia School of Law, is a former dean and professor of law at the University of Akron School of Law and dean of the Antioch School of Law in Washington, D.C.

The following is an interview with Hunt on how BE readers can become more well-informed investors and safeguard their money from unsolicited and unregistered brokers.

BE: How can investors protect themselves from possible securities fraud?

Hunt: I think one of the principal reasons people are cheated is because of greed. Someone tells them that they can make a 10% or 15% return on their investment, and they go for it and it turns out to be unrealistic. We have started a series of town meetings around the country to try to educate investors about what to look for when making investments.

BE: What are some key areas to examine before investing your money?

Hunt: You should look for reliable, registered brokers and not to get rich quick because there is no magic out there. You should really be wary of people you don't know making cold calls over the phone to try to sell you investments. You should also ask around with respect to the trust-worthiness of any broker you are dealing with.

BE: How can the reader ensure that certain stock investments are a good value? …