Newspaper article Sarasota Herald Tribune

Research Can Avoid Fraudsters

Newspaper article Sarasota Herald Tribune

Research Can Avoid Fraudsters

Article excerpt

STREETWISE

I wrote recently about the abundance of publicity over the need to check out people to whom you entrust your money. One often- suggested Internet site on which to do such checks is www.BrokerCheck.com. While not infallible, this is certainly a recommended procedure to help you avoid the mistakes made by those who failed to take such precautions.

Unfortunately, Florida seems to be the motherlode for those looking to take advantage of the elderly and the uniformed. I mentioned one of the best examples of this in a column over a year ago in which I quoted Frank Devine, a producer for the "60 Minutes" television show. "Coming to Florida in search of stories about scam artists, fraudsters and outrageous behavior is like going to the Louvre in search of art; it's everywhere," he said.

Florida's sordid reputation for financial fraud was reinforced by an article in the Sarasota Herald-Tribune about Dave and Jackie Harding, who lost over $200,000 after investing with Brett Hartshorn, a supposed businessman who was participating in currency speculation.

Hartshorn, who managed online trading accounts for the Hardings and others, never registered with regulatory authorities. But his failure to register was a minor part of the problem.

The Hardings gave Hartshorn control of more than $200,000 in an online foreign-exchange trading account that he opened for them, funded by a line of credit on their Laurel Lakes home. Within months, it was gone.

Never, never, borrow money to invest in any kind of financial market. First of all, it is not legal. More importantly, it is stupid. Note that this does not apply to margin trading, in which the margined securities are the loan's collateral.

"He pitched himself as someone who was very successful doing this," Harding said of Hartshorn.

I do not care who it is or how long you have known them, always check their credentials via a regulatory agency using a system such as www.brokercheck.com. You also want to independently verify their track record of investment success. Again, use the Internet.

Court records available on the Internet for a small fee would have shown that creditors had filed at least five lawsuits against Hartshorn and his wife since 1996. …

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