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Telephone Calls From Brokers

Oct. 12, 2000

Honest brokers use "cold calling" to find clients for the long term. They ask questions to understand your financial situation and investment goals before recommending that you buy anything. While you may find their telephone calls annoying, honest brokers who follow the cold calling rules are acting within their rights. Click here to read more about the practice of cold calling.

Watch for these signs of trouble:

High-pressure sales tactics. Aggressive cold callers speak from persuasive scripts that include retorts for your every objection. As long as you stay on the phone, they'll keep trying to sell. And they won't let you get a word in edgewise. Beware of brokers who pressure you to buy before you have a chance to think about - or investigate - the "opportunity."

A "once-in-a-lifetime" opportunity, or claims of "inside" or "confidential" information. Don't fall for brokers who promise spectacular profits or "guaranteed" returns. Don't deal with brokers who refuse to send you written information about the investment.
Click here to read more information from the SEC about what questions you should ask a broker who calls you "cold."

We have provided this information as a service to investors.  It is neither a legal interpretation nor a statement of SEC policy.  If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.

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