tailieunhanh - Investor Alert: Self-Directed IRAs and the Risk of Fraud

Brazil’s capital market remains focused on short term instruments. Most financial contracts among residents are indexed to the overnight interest rate, although there has been a gradual trend towards increasing duration in the recent years. This largely short term structure reflects long-standing fundamental factors, including a legacy of past high inflation that typically is associated with a more short–term focus for investing. Moreover, the flatness of the yield-curve––a reflection of the high level of short-term interest rates and degree of indexation of debt holders––contribute to a low secondary market turnover ratio, constraining overall market development | Investor Alert Self-Directed IRAs and the Risk of Fraud The SEC s Office of Investor Education and Advocacy OIEA and the North American Securities Administrators Association NASAA are issuing this Investor Alert to warn investors of the potential risks associated with investing through self-directed Individual Retirement Accounts self-directed IRAs . NASAA has noted a recent increase in reports or complaints of fraudulent investment schemes that utilized a self-directed IRA as a key feature. State securities regulators have investigated numerous cases where a self-directed IRA was used in an attempt to lend credibility to a fraudulent scheme. Similarly the SEC has brought numerous cases in which promoters of fraudulent schemes steered investors to self-directed IRAs. While self-directed IRAs can be a safe way to invest retirement funds investors should be mindful of potential fraudulent schemes when considering a self-directed IRA. Investors should understand that the custodians and trustees of self-directed IRAs may have limited duties to investors and that the custodians and trustees for these accounts will generally not evaluate the quality or legitimacy of an investment and its promoters. As with every investment investors should undertake their own evaluation of the merits of a proposal and should check with regulators about the background and history of an investment and its promoters before making a decision. I. Investing through Self-Directed IRAs An Individual Retirement Account IRA is a form of retirement account that provides investors with certain tax benefits for retirement savings. Some common examples of IRAs used by investors include the traditional IRA Roth IRA Simplified Employee Pension SEP IRA and Savings Incentive Match Plan for Employees SIMPLE IRA. All IRA accounts are held for investors by custodians or trustees. These may include banks trust companies or any other entity approved by the Internal Revenue Service IRS to act as a trustee or .