Investor's Watchdog.com: Stock, finance and investment protection for investors

Illinois securities regulators have charged a man who changed his name to Kareem Abdul-Jabbar with violation of Illinois’s Securities Act.  According to the regulators, Abdul-Jabbar sold at least one promissory note to an investor for $55,000 without telling the investor that he had been convicted of a felony (the charge does not detail the previous conviction).  The Illinois regulators charge (correctly) that a prior felony conviction would be important to a reasonable investor and that the omission was, therefore, legally material.

Notice three things about this case.  First, it involved the sale of a promissory note.  Promissory notes have become the vehicle of choice for investment scamsters.  Beware anyone who tries to sell you one.

Second, notice the alleged failure to reveal a criminal background.  What do you know about the person who has access to your life savings?  How much of it came from a source other than the broker or investment adviser?  How much of it have you verified?  People who have been convicted of troubling crimes have to earn a living when they leave prison.  Many of them go into the investment business.  None of them talks about it when soliciting your trust.

Finally, notice the name change.  While I do not know the defendant involved in this case, many scam artists have narcissistic tendencies.  Being the center of the universe is extremely important to them.  Could wanting to have a famous name be a symptom?

Return of investment is more important than return on investment.  Smart investors understand their vulnerability and take sensible precautions.  Others often lose their life savings.