Ponzi-Proof Your Portfolio

Avoid falling victim to a ponzi scheme, with these 5 easy-to-understand tips to avoid falling victim to the next ponzi scam artist.



- Check out the accountant. Call the firm, demand a client list, ask who audits the money-management firm you're considering. A fraud always involves the bean counter.

- Ask the money manager to explain in laymans terms how he (or she) invests. Dont be shy about asking questions. If he (or she) cant explain it, it may be because he (or she) doesn't have a decent (or legal) strategy.

- Do not assume that someone else has done the due diligence. This is huge. Just because there are important or smart people involved, it doesn't mean they have checked the company out.

- Check out FINRA BrokerCheck, a free online tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers.

- Never, ever, put all your eggs in one basket. Even the SEC, apparently, can be fooled.