[From the SEC] How Fraudsters Try to Look Legit

It’s a hard, cold fact: fraudsters lie. That’s how they attempt to make money. They lie when they promise you "guaranteed" high returns with little or no risk. And they lie when they forget to mention that the company or product they’re touting doesn’t exist.

Some fraudsters tell straightforward lies, fabricating facts or making bogus claims. That’s why we encourage investors to do their own independent research and to remember that wonderful, timeless adage: "If it sounds too good to be true, it probably is." Other fraudsters salt their stories with grains of truth to give their schemes an air of legitimacy. For many years, the SEC and securities regulators around the globe have been encouraging investors to investigate before they invest — to ask tough questions about their investments and the people who sell them. Taking their cue from us, some fraudsters now pretend to do the same.

One ruse fraudsters use involves assurances that an investment has been registered with the appropriate agency. The fraudsters will purport to give you the agency’s telephone number and invite you to verify for yourself the "authenticity" of their claims. But even if the agency does exist, the contact information almost certainly will be false. Instead of speaking with an actual government official, you’ll reach the fraudsters or their colleagues — who will give the company, the promoter, or the transaction high marks.

Another trick involves the misuse of a regulator’s seal. The fraudsters copy the official seal or logo from the regulator’s website — or create a bogus seal for a fictitious entity — and then use that seal on documents or web pages to make the deal look legitimate. You should be aware that the SEC — like other state and federal regulators in the U.S. and around the world — does not allow private entities to use its seal. Moreover, the SEC does not "approve" or "endorse" any particular securities, issuers, products, services, professional credentials, firms, or individuals.

Here’s how you can protect yourself against these and other deceptive tactics:

Deal Only With Real Regulators — It’s not hard to figure out who the real regulators are and how you can contact them. You’ll find a list of international securities regulators on the website of the International Organization of Securities Commissions (IOSCO) and a directory of state and provincial regulators in Canada, Mexico, and the U.S. on the website of the North American Securities Administrators Association (NASAA). If someone encourages you to verify information about a deal with an entity that doesn’t appear on these lists — such as the "Federal Regulatory & Compliance Department," the "Securities and Registration Compliance" agency, or the "U.S. Securities Registration Bureau" — you’re probably dealing with fraudsters. You’ll find legitimate contact information for the SEC in the Contact Us section of our website and on SEC Division Homepages. If you’re ever unsure whether you’re dealing with someone from the real SEC, use our online Question Form to ask us.

Be Skeptical of Government "Approval" — The SEC does not evaluate the merits of any securities offering, nor do we determine whether a particular security is a "good" investment. Instead, the SEC’s staff reviews registration statements for securities offerings and declares those statements "effective" if the companies appear to have satisfied our disclosure rules. In general, all securities offered in the U.S. must be registered with the SEC or must qualify for an exemption from the registration requirements. You can check to see whether a company has registered its securities with the SEC and download its disclosure documents using our EDGAR database of company filings.

Look Past Fancy Seals and Impressive Letterheads — Most people who use computers know how easy it can be to copy and paste images. As a result, today’s technology allows fraudsters to create impressive, legitimate-looking websites and stationery at little to no cost. Don’t be taken in by a glossy brochure, a glitzy website, or the presence of a regulator’s official seal on a web page or document. Again, the SEC does not authorize private companies to use our seal — even as a legitimate link to our website. If you see the SEC seal on a company’s website or materials, think twice.

Check Out the Broker and the Firm — Always verify whether any broker offering to buy or sell securities is properly licensed to do business in your state, province, or country. If the person claims to work with a U.S. brokerage firm, call NASD’s Public Disclosure Program hotline at (800) 289-9999 or visit NASD’s website to check out the background of both the individual broker and the firm. Be sure to confirm whether the firm actually exists and is current in its registration, and ask whether the broker or the firm has a history of complaints. You can often get even more information from your state securities regulator.

Be Wary of "Advance Fee" or "Recovery Room" Schemes — An increasing number of investment-related frauds target investors worldwide who purchase "microcap" stocks, the low-priced and thinly traded stocks issued by the smallest of U.S. companies. If the stock price falls or the company goes out of business, the fraudsters swoop in, falsely claiming that they can help investors recover their losses — for a substantial fee disguised as some type of tax, deposit, or refundable insurance bond. As soon as an unwary investor pays the "advance fees," the fraudsters disappear — leaving the investor with even higher losses. For more information about these types of frauds, please read our publication entitled The Fleecing of Foreign Investors.

If you want to invest wisely and steer clear of frauds, you must get the facts. Never, ever, make an investment based solely on a promoter’s promises or what you see on the Internet — especially if the investment involves a small, thinly-traded company that isn’t well known. And don’t even think about investing on your own in small companies that don’t file regular reports with the SEC, unless you are willing to investigate each company thoroughly and to check the truth of every statement about the company. For more information on investing wisely, visit the Investor Information section of our website.

http://www.sec.gov/investor/pubs/fakeseals.htm

Notice From The SEC: We have provided this information as a service to investors. It is neither a legal interpretation nor a statement of SEC policy.If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.

[From the SEC] Day traders rapidly buy and sell stocks throughout the day in the hope that their stocks will continue climbing or falling in value for the seconds to minutes they own the stock, allowing them to lock in quick profits. Day traders usually buy on borrowed money, hoping that they will reap higher profits through leverage, but running the risk of higher losses too.

Here are some of the facts that every investor should know about day trading:

• Be prepared to suffer severe financial losses

  Day traders typically suffer severe financial losses in their first months of trading, and many never graduate to profit-making status. Given these outcomes, it’s clear: day traders should only risk money they can afford to lose. They should never use money they will need for daily living expenses, retirement, take out a second mortgage, or use their student loan money for day trading.

• Day traders do not "invest"

  Day traders sit in front of computer screens and look for a stock that is either moving up or down in value. They want to ride the momentum of the stock and get out of the stock before it changes course. They do not know for certain how the stock will move, they are hoping that it will move in one direction, either up or down in value. True day traders do not own any stocks overnight because of the extreme risk that prices will change radically from one day to the next, leading to large losses.

• Day trading is an extremely stressful and expensive full-time job

  Day traders must watch the market continuously during the day at their computer terminals. It’s extremely difficult and demands great concentration to watch dozens of ticker quotes and price fluctuations to spot market trends. Day traders also have high expenses, paying their firms large amounts in commissions, for training, and for computers. Any day trader should know up front how much they need to make to cover expenses and break even.

• Day traders depend heavily on borrowing money or buying stocks on margin

  Borrowing money to trade in stocks is always a risky business. Day trading strategies demand using the leverage of borrowed money to make profits. This is why many day traders lose all their money and may end up in debt as well. Day traders should understand how margin works, how much time they’ll have to meet a margin call, and the potential for getting in over their heads.

• Don’t believe claims of easy profits

  Don’t believe advertising claims that promise quick and sure profits from day trading. Before you start trading with a firm, make sure you know how many clients have lost money and how many have made profits. If the firm does not know, or will not tell you, think twice about the risks you take in the face of ignorance.

• Watch out for "hot tips" and "expert advice" from newsletters and websites catering to day traders

  Some websites have sought to profit from day traders by offering them hot tips and stock picks for a fee. Once again, don’t believe any claims that trumpet the easy profits of day trading. Check out these sources thoroughly and ask them if they have been paid to make their recommendations.

• Remember that "educational" seminars, classes, and books about day trading may not be objective

  Find out whether a seminar speaker, an instructor teaching a class, or an author of a publication about day trading stands to profit if you start day trading.

• Check out day trading firms with your state securities regulator

  Like all broker-dealers, day trading firms must register with the SEC and the states in which they do business. Confirm registration by calling your state securities regulator and at the same time ask if the firm has a record of problems with regulators or their customers. You can find the telephone number for your state securities regulator in the government section of your phone book or by calling the North American Securities Administrators Association at (202) 737-0900. NASAA also provides this information on its website at www.nasaa.org/QuickLinks/ContactYourRegulator.cfm.

http://www.sec.gov/investor/pubs/daytips.htm

Notice From The SEC: We have provided this information as a service to investors. It is neither a legal interpretation nor a statement of SEC policy.If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.

1. Liliane Bettencourt (born 21 October 1922) ranks $12 among the world’s wealthiest people. She is also the wealthiest woman in the world as of the writing of this piece. Bettencourt was the only child of Mr. Eugène Schueller, the founder of L’Oréal, one of the world’s leading cosmetics and beauty companies. In 1927, her mother died when Liliane was 5 years old. In 1950, she married French politician André Bettencourt and together, they live in Neuilly-sur-Seine, France. They have one daughter, Françoise, who married Jean-Pierre Meyers, the grandson of a rabbi who died in an Auschwitz concentration camp. Françoise Bettencourt Meyers is a member of L’Oréal’s board of directors. In 1957, Bettencourt inherited the L’Oréal fortune from her father. She is the principal shareholder of L’Oréal. The company ownership breakdown: 27.5% by Liliane Bettencourt, 26.4% by Nestlé, the remaining 46.1% are publicly traded. Bettencourt’s family has a reputation for secrecy, partly due to controversy surrounding her father’s connection with La Cagoule, a violent French fascist-leaning and anti-communist group. She created the Bettencourt Schueller Foundation, which awards the "Liliane Bettencourt Prize for Life Sciences" to a European researcher under the age of forty-five. Net worth: $20.7 billion [ source ]

2. Christy Ruth Walton is the wife of late John T. Walton who was the son of the late Sam Walton, founder of Wal-mart. After her husband’s death, Christy Walton became the 17th wealthiest person in the world with a net worth of USD $15.9 billion. As of March 2007, she is the 24th richest person and the 2nd richest woman in the world.

She currently resides in Jackson, Wyoming. Net worth: $16.7 billion [ source ]

3. Alice Louise Walton (born October 7, 1949) is the daughter of Wal-Mart founder Sam Walton and Helen Walton, and sister of S. Robson Walton, John T. Walton, and Jim Walton.

She is a graduate of Trinity University and lives in Mineral Wells, Texas on The Rocking W Ranch.

Wal-Mart founder Sam Walton’s only daughter, Alice chose not to get involved in the operations of the family business. For a time she was a broker for E.F. Hutton. Her hobby is horses.

Walton was the 20th largest individual contributor to 527 committees in the U.S. presidential election, 2004, donating $2.6 million to the conservative Progress for America group. During the 2004 election cycle, Progress for America ran advertisements supporting the Iraq occupation and praising George W. Bush for preventing "another 9/11". The ads were criticized for their inaccuracy.

In 1989, Alice Walton killed a 50-year-old pedestrian in an automobile accident in Springdale, Arkansas. Although Walton was speeding, and had been been ticketed multiple times over the previous year for reckless driving incidents, no charges were filed in connection to the 1989 fatality. In 1996, Walton was cited for driving while intoxicated and fined $925. Net Worth: $16.6 billion [ source ]

4. Helen Walton [Robson Kemper] (born December 3, 1919 in Claremore, Oklahoma) is the widow of Wal-Mart founder Sam Walton. As of March 2007 she is listed as the 29th wealthiest person and the 4th wealthiest woman in the world. Her late husband, Sam Walton left his ownership in Wal-Mart to her and to their children: S. Robson Walton (Rob), John T. Walton (d.2005), Jim Walton, and Alice Walton. Rob Walton chairs the board of directors of Wal-Mart, on which John served until his death. The others are not directly involved in the company except through their voting power as shareholders. Net worth: $16.4 billion [ source ]

5. Abigail Johnson (born January 7, 1962) is an American financial businessperson. She runs Fidelity Investments together with her father Edward Johnson. She’s an alumna of Buckingham Browne & Nichols. She earned a bachelor’s degree at William Smith College. She later received an MBA from Harvard University. She lives in Milton, Massachusetts. She’s the 42nd richest person in the world and the 5th richest woman in the world as of March 2007. Net Worth: $13.0 billion [ source ]

6. Barbara Cox Anthony (born 1923) is the second and youngest daughter of James M. Cox, a Democratic Governor of Ohio, newspaper publisher and broadcaster. With her sister Anne Cox Chambers she inherited via a trust ownership and control of her father’s company, now called Cox Enterprises. She lives in Honolulu, Hawaii, in the United States. She’s ranked #45 among the worlds richest people and #6 among the world’s richest women as of March 2007. Net worth: $12.6 billion [ source ]

7. Anne Cox Chambers (born December 1, 1919) is a billionaire media proprietor. She is the daughter of James M. Cox, a newspaper publisher and senior Democratic political identity. With her sister Barbara Cox Anthony she owns and controls her father’s business interests, through Cox Enterprises. She lives in Atlanta, Georgia, in the United States.

A generous financial supporter of the Democratic Party, she was President Jimmy Carter’s pick as US Ambassador to Belgium from 1977 to 1981. As of March 2007 she is tied with her sister Barbara Cox Anthony as the 45th richest person in the world and the 6th richest woman. Net worth: $12.6 billion [ source ]

8. Birgit Rausing - Husband Gad Rausing died in 2000 leaving her and their 3 children ownership to packaging giant Tetra Laval, which his father founded in 1944. Company now has $12.5 billion in sales. All 3 children sit on the company’s supervisory board; Jorn is head of its mergers and acquisitions. Otherwise family keeps low profile in part due to kidnapping attempt on Jorn in 1989. What else is known: Birgit lives quietly in Switzerland; Kirsten lives in the U.K. and is a passionate horsewoman; and Finn is chairman of the Swedish R.R. Institute of Applied Economics. As of March 2007 she is ranked #55 among the richest people in the world and the #8th richest woman. Net Worth: $11.0 billion. [ source ]

9. Jacqueline Mars - Grandchild of Frank and Ethel Mars, candymakers who started selling chocolates from their kitchen in Tacoma, Wash. 1919. Father, Forrest Sr. (d. 1999), took reins, introduced malt-flavor nougat, which became core of Mars candy bar line: Snickers, Milky Way, 3 Musketeers. Also created Twix, M&Ms, Skittles. Obsessed with efficiency in factories: punctuality, measurement, quality. Added pet food (Whiskas, Pedigree), Uncle Ben’s Rice, electronic components for vending machines. Today Mars is world’s largest confectioner. Expanding pet food division: recently bought Doane Pet Care (makes Wal-Mart’s Ol’ Roy label) and the maker of Greenies, nation’s top-selling dog treat. As of March 2007 ranked #58 among the world’s richest people and the #9 wealthiest woman in the world. Net Worth: $10.5 billion. [ source ]

10. Susanne Klatten - Inherited stake in automaker BMW from late father Herbert Quandt, who rescued it from bankruptcy decades ago. Also inherited 50% stake in pharmaceutical and chemical manufacturer Altana. Last September the $4.3 billion (sales) company sold its pharmaceutical division, best known for its blockbuster ulcer drug Pantoprazol which comes off patent in 2009, to Scandinavian firm Nycomed for $6 billion. Susanne will pocket about half of the proceeds; a trained economist with an M.B.A., will remain active on Altana’s board of supervisors. Ranked #68 among the world’s richest people and #10 richest woman in the world as of March 2007. Net Worth: $9.6 billion [ source ]

According to the Forbes magazine annual list of richest people, India has the most billionaires in Asia. Forbes lists 36 billionaires in India with a combined total wealth of $191 billion. India has reportedly taken over the lead from Japan. Japan enjoyed a two year reign as the Asian nation with the most billionaires. At last report, there were 24 billionaires in Japan.

Top Billionaires from India

Lakshmi Mittal, 56 , (5th richest man in the world) - Steel titan known for his dealmaking won six-month battle for rival Arcelor. The $34 billion merger created an industry behemoth that now accounts for 10% of world’s production, putting it well ahead of Japan’s Nippon Steel. Mittal owns 44% of combined $80 billion (sales) Arcelor-Mittal and is its chief executive. Mittal began his career working in the family’s steelmaking business in India. Today Arcelor-Mittal operations span more than 60 countries and employ 330,000. Not content to dominate the steel industry, Mittal is branching out. Among his latest deals: spent $980 million for a 50% stake in Kazakh oil firm Caspian Investment Resources, a subsidiary of Russia’s Lukoil. This Londoner is the UK’s richest resident and the 5th richest man in the world [ source ]

Mukesh Ambani, 49 , (14th richest person in the world) - Snatched title of India’s richest resident from Azim Premji. Since splitting with younger brother Anil (see) in 2005 and taking control of $20 billion (revenues) Reliance Industries, founded by his late father Dhirubhai Ambani, fortune has soared by $11 billion. Oil-refining subsidiary Reliance Petroleum, in which Chevron has 5% stake, listed May 2006. Betting $5.5 billion on retail ventures including Reliance Fresh, a chain of food stores; 60 are now open. Megaplans include $10 billion investment to develop special economic zones. Recently got board approval to hike personal stake in Reliance Industries from 44% to 48%. Net worth: $20.1 billion [ source ]

Anil Ambani, 47 , (18th richest person in the world) - Feud with older brother Mukesh led brothers to split up family fortune, created by late father Dhirubhai Ambani, in 2005. While Mukesh got Reliance Industries and Reliance Petroleum, Anil took over family’s telecom, finance and power interests. Net worth has surged by more than $12 billion in past year, thanks in part to 2006 listing of telecom operator Reliance Communications, of which he holds 66%. Lost out to Vodafone in race to acquire Hutchison Whampoa’s 67% stake in Hutchison Essar, India’s third-largest mobile phone operator. Is a marathon runner; wife Tina, a former Bollywood actress, is a patron of contemporary Indian art. Net worth: $18.2 billion [ source ]

Azim Premji, 61, (21st richest person in the world) - nherited a cooking oil business from his father that he transformed into technology services giant Wipro. Employs more than 55,000 people. In a bid to combat rising wage costs, plans to recruit 14,000 recent graduates from college campuses. Recently set up Wipro Arabia, a joint venture with Saudi Arabia’s Dar Al Riyadh group. Often wears shirts with the company logo embroidered on the pocket. Bangalore Tiger, a book on Wipro’s rise was published last year. Net Worth: $17.1 billion [ source ]

Kushal Pal Singh,75 , (62nd richest person in the world)This former army officer, known as KP, joined his father-in-law’s Delhi Land & Finance in 1961. Singh later built DLF City in Gurgaon, his showpiece township on the outskirts of Delhi, by acquiring land from farmers. Transformed DLF into one of India’s biggest real estate developers. Plans to list flagship DLF Universal fell apart over complaint by minority investors last year but are now revived. Building Mall of India, country’s biggest. New hotel joint venture with Hilton. Keen golfer, now leaves son Rajiv, daughter Pia to run operations. Net Worth: $10 billion [ source ]

Sunil Mittal, 49, (69th richest person in the world) - Son of a politician, he built his Bharti group, along with two siblings, into India’s largest mobile phone operator in just ten years. Vodafone and SingTel both own stakes in recently flagship Bharti Airtel. Vodafone, following its purchase of Hutchison’s stake in rival mobile operator Hutchison Essar, has agreed to sell 5.6% in Bharti back to Mittal for $1.6 billion. Bharti is also investing $2.5 billion in a new retailing venture in partnership with Wal-Mart. Also has partnerships with Axa for insurance and with the Rothschild family for exporting fruits and vegetables. Net worth: $9.5 billion [ source ]

Kumar Birla, 39 , (86th richest person in the world) - Became chairman of commodities conglomerate at age 28 after father’s death. His $12 billion (sales) Aditya Birla Group is India’s largest copper, aluminum producer. Expanding in the U.S. with recent $6 billion acquisition of NYSE-listed aluminum manufacturer Novelis. After spat with Tata group paid nearly $1 billion to buy former partner’s stake in mobile phone venture Idea Cellular and took it public. Also moved into retail by acquiring a majority stake in Trinethra Superretail, a chain of supermarkets and convenience stores. Net worth: $8.0 billion [ source ]