The Securities and Exchange Commission (“SEC”) and the
Financial Industry Regulatory Authority (“FINRA”) issued an investor alert
concerning the risks involved when selling the rights to an income stream or
investing in someone else’s income stream.
Investor alerts are statements issued by the SEC and FINRA seeking to
raise public awareness about suspicious activities in the securities markets. This particular investor alert can be viewed here.
Lori J. Schock, Director of the SEC’s office of Investor
Education and Advocacy, stated, “Investors should always learn as much as
possible before making an investment decision, and this is certainly true with
respect to investing in pension or structured settlement income stream
products.” This particular invest alert
was brought about because of the increased popularity of income stream
products, and seeks to educate investors about inherent potential pitfalls in
pension and settlement income stream products.
One potential pitfalls include the high fees usually associated
with these products. Yet another is the fact
these product may not be considered “securities” under US law and are likely not
registered with the SEC. Also, investors
should consider the non-liquid nature of these products, as they may be difficult
to sell in the event you need the capital you invested in the products.
If you have purchased a pension or settlement income stream
product and believe there has been suspicious activity surrounding your
purchase, please contact the attorneys at Block & Landsman to discuss your
legal options.
