Q&A: SEC and FTC seals of approval

September 5, 2008

An unfamiliar broker called me to suggest some promising stock investments. I asked him to send me the details in writing, and he followed up with a letter that featured seals of approval from both the Securities and Exchange Commission (SEC) and Federal Trade Commission (FTC). Does that mean these investments are legitimate?

Q: An unfamiliar broker called me to suggest some promising stock investments. I asked him to send me the details in writing, and he followed up with a letter that featured seals of approval from both the Securities and Exchange Commission (SEC) and Federal Trade Commission (FTC). Does that mean these investments are legitimate?

A: No. In fact, it probably means just the opposite. Neither the SEC nor FTC endorses specific investment transactions. This "broker" is likely a con artist who copied the official seals from the federal agencies' websites to lure potential investors. Don't take the bait.