Even tech-savvy and careful investors who are watchful about corporate malpractices and keep track of the distress signs often fall prey to frauds, finds a recent study.
These investors end up tracking the wrong warning signs — meaning the warning signs they look for are clear only after it is too late to protect their investment, the study found.
“Individual investors get hurt if they own stock in fraudulent companies that cook the books, such as Enron. But we wanted to know how investors think about fraud and whether they try to protect themselves,” said lead author Joe Brazel, a professor of accounting at North Carolina State University.
The researchers surveyed 194 experienced, non-professional investors from 38 states about fraud and their investment activity.
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Source Credits: IANS