By: Jack Waymire | June 8, 2009 | Bad Financial Advice, Financial Advisors, Illegal Schemes & Scams, Investment Performance
The Securities and Exchange Commission obtained an emergency court order to freeze the assets of a former financial professor at Texas A&M and a Houston attorney who was also a CPA.
The SEC charged Robert Watson, the professor, and Daniel Petroski, the attorney, with "raising" $19 million from investors who were told they could earn annual returns of 23% using a foreign exchange program.
"The defendants developed professional-looking bogus accounts in the U.S. and Switzerland that supported their claims" said Rose Romero director of the SEC’s Fort Worth office.
Watson and Petroski created the perception of competence and integrity. Investors bought the perception and a sales pitch that promised unusually high returns. Once again investors failed to conduct adequate due diligence to determine whether this investment opportunity was real or a scam.
"If it’s too good to be true it usually is"
One Response to “Greed Increases Investment Risk”
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robert scott
June 20th, 2009 at 4:43 am
Great Post Jack! Since the stock market has averaged a little less that 10% annually over the last 20 years and less than 2% annually in the last 10, any investment that suggest returns in excess of 10% annually should be looked at with extreme caution.