Tuesday, August 11, 1998
Thank you for being with us today. We're here to announce a joint federal-state law enforcement sweep that has targeted nearly 60 bogus entertainment and media-related investment opportunities. With me today are:
Richard H. Walker, Director, Division of Enforcement, Securities and Exchange Commission;
Denise Voigt Crawford, President, North American Securities Administrators Association, Inc.; and
Charlie Hammond and Dean Cooke, two of the victims of the scams we are discussing.
We are especially pleased to have Kenneth Yednock and Jeanne Royal Singley from The Internal Revenue Service, as well. The IRS will be cooperating with us in the consumer education initiative tied to this sweep.
More than ever, Americans are being asked to make their own investment decisions and arrange for their own retirement plans. Today, even Gen-Xers are setting up IRA's at the ripe old age of 25.
When asked why he robbed banks, Willie Sutton said, "That's where the money is." And that's why there's an increase in the number of investment scams involving retirement plans. They represent a large pool of money. At least one of the FTC cases was advertised with claims that it was approved by The IRS for IRA investment. The IRS is here to tell you they never approve investments.
Show biz schemes have enormous appeal. They play on the glitz of Hollywood. They tout fabulous returns and offer consumers the chance to be part of an exciting business. The fact is consumers who bought into these risky deals lost tens of thousands of dollars.
The FTC cases we're announcing today involve investment opportunities in two infomercial production companies, a cable-TV network, an Internet gambling casino and a shipboard casino -- a genuine floating crap game. Consumers invested thousands of dollars in these projects -- sometimes tens of thousands. And unfortunately, they're not expected to recover significant portions of their investments.
That's why we tell consumers that entertainment and media-related investments can be Risky Business. Consumers who don't know the industry well should take a cautious approach to investing.
1. This statement may not be an exact transcript of Ms. Bernstein's remarks.