Selasa, 28 Oktober 2008

Corporate governance risk of commodity trading


As if there weren’t enough things to worry about, you should always watch out for plain and simple fraud. Although the Commodity Futures Trading Commission (CFTC) and other regulatory bodies do a decent job of protecting investors from market fraud, there is always the possibility that you will become a victim of fraud. For example, your broker may hide debts or losses in offshore accounts, as was the case with Refco. One way to prevent being taken advantage of is to be extremely vigilant about where you’re putting your money. Make sure that you thoroughly research a firm before you hand over your money. Unfortunately, there are times when no amount of research or due diligence is able to protect you from fraud — it’s just a fact of the investment game.

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