The U.S. Securities and Exchange Commission is warning investors to not make investment decisions based solely on celebrity endorsements.
The SEC warned in an investor bulletin, “celebrity endorsement does not mean that an investment is legitimate or that it is appropriate for all investors.” According to the SEC, celebrities, themselves, can be lured into scams. The SEC adds, celebrities may be linked to products without their consent.
Even if the celebrity endorsement is real, the SEC says follow the following steps before investing: 1) Check out the background, including registration or license status, by using investor.gov. 2) Learn about the company’s finances, organization and business prospects by looking through their prospectus and financial reports, which may be available at the SEC’s EDGAR database, and 3) Consider the potential costs, fees, risks and benefits and how they fit into your investment plans.