SEC Warning: Every Investor must be Aware

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As a Class-A commercial real estate investor in a rapidly expanding crowd-funding space, it’s important that you fully understand the risks and potential scams that do exist.  The US Securities & Exchange Commission (SEC) just issued a new alert with some key warning signs. For example, according to the SEC, “The federal securities laws limit many private securities offerings to accredited investors.  Be highly suspicious of anyone who offers you private investment opportunities without asking about your net worth or income.”

If a site does not ask if you are accredited, think about moving on.

“Research shows that con artists are experts at the art of persuasion, often using a variety of influence tactics tailored to the vulnerabilities of their victims,” notes the SEC.

“Common tactics include phantom riches (dangling the prospect of wealth, enticing you with something you want but can’t have), source credibility (trying to build credibility by claiming to be with a reputable firm or to have a special credential or experience), social consensus(leading you to believe that other savvy investors have already invested), reciprocity (offering to do a small favor for you in return for a big favor), and scarcity (creating a false sense of urgency by claiming limited supply).”

Read more about the SEC's Investor Alert: 10 Red Flags That An Unregistered Offering May Be a Scam.