Content area
Full Text
Securities industry watchdogs are becoming increasingly concerned about stockbrokers and investment advisers who tout their fiscal wares on Los Angeles' cable television stations.
Experts question whether there is sufficient regulatory oversight to protect gullible viewers from scam deals broadcast in lengthy infomercials by not-so-legitimate brokers, who often appear in pseudo-newsroom settings and flash toll-free telephone numbers.
"While it is a difficult area to regulate, it's certainly an area we're going to start looking at carefully and focus on," said Fredric Roberts, board chairman of the National Association of Securities Dealers, a trade body which regulates the nation's 5,200 brokerage firms and 429,000 stockbrokers.
"Sophisticated institutional investors are largely uninterested in the types of commercials and infomercials that appear on television. It is the individual investor who is more affected by this kind of medium. They have to remember that just because they see it on television does not make it factual," said Roberts, who is president of his own Los Angeles brokerage firm.
Such advertising is big business. For instance, local station KWHY-TV, Channel 22, which broadcasts both business news and Spanish-language programming, receives more than 80 percent of its business programming revenues from brokers who purchase slots of time ranging from one to 30 minutes, said a station official.
Such advertisers are required to be registered as either an investment adviser or broker-dealer with the state Department of Corporations and the Securities and Exchange Commission. However, securities experts caution that some advertisers may not be registered and, even if they are, still may be the subject of current investigations. have had complaints from former investors or been investigated in other states.
"This is a huge problem. I know scammers who advertise. The public is at significant...