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CNN Live Saturday
Interview with Cathy Cox
Aired July 20, 2002 - 17:10 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: President Bush today said before Congress takes its August recess, he wants a compromise bill drafted that would stamp out business fraud. Kelly Wallace joins us now from Washington to look at what the government can and should do -- Kelly.
KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: Fredricka, President Bush is trying to do two things -- boost investor confidence and help Republicans on this corporate responsibility issue. That is why he threw down this marker in his weekly radio address.
(BEGIN AUDIO CLIP)
GEORGE. W. BUSH, PRESIDENT OF THE UNITED STATES: Some in Congress have predicted that it will take two months for the House and Senate to send a bill to my desk. There's no good reason for the legislative process to take that long. I call again on Congress to pass a bill before the August recess. It's time to act decisively, to bring a new era of integrity to American business.
(END VIDEO CLIP)
WALLACE: And the bill that is likely to make its way to President Bush's desk is the bill pushed by Democratic senator Paul Sarbanes. This bill is much tougher than the House legislation. It calls for an independent oversight board for the accounting industry.
This board would have more power than the House proposal. You are look actually at some video of President Bush yesterday talking to the troops. Though senator Sarbanes saying today on CNN's Novak, Hunt and Shields his proposal is needed to save capitalism as we know it.
SEN. PAUL S. SARBANES (D), MARYLAND: We're out to restore capitalism. We want to get a system in place that will provide some assurances that these abuses won't happen again in the future, and that's what we're trying to do with this legislation.
WALLACE: But these numbers might give Senator Sarbanes and President Bush some pause. In a new "Newsweek" poll, only 27 percent of those polled thought legislation would have a major effect in reducing future corporate wrongdoing. Sixty-two percent said they did not think it would have, or they thought it would have a minor effect or no effect at all, raising lots of questions, Fredricka, about what Washington can do to really boost investor confidence -- Fredricka. WHITFIELD: All right. Thanks very much, Kelly, from the White House.
Well, desperate times mean desperate measures. So it's only natural if the crashing market has cost you a lot of money, you might be looking for ways to recover fast. If I've just described you, then you might be a good target for a scam artist, and there are a whole lot out there.
Georgia secretary of state Cathy Cox, who is also the State Securities Commissioner, is here to talk more about the problem, and first off, Cathy, how do you even identify that you just might be a target of a scam? There are so many varieties out there. What are some of them?
CATHY COX, GA. SECURITIES COMM.: Well, you really do have to be aware in times like these that the crooks are coming out of the woodwork, they're trying to take advantage of this downturn in the market for people who are looking for far better returns. So any time you hear something that sounds a little too good to be true, you should automatically be suspicious.
WHITFIELD: For example, we've got three visually to help us remind us of the kinds of scams that are out there. Affinity group fraud, what does that mean?
COX: Well, that's really one of the more troubling, because these involve people who take advantage of membership in a church group or a civic organization, and they come in and tell you that they're part of your group.
They have an affinity with you, and therefore you should trust them, because they're only dealing with people of your faith or your church or your group. And people fall into these traps. They develop that trust based on nothing whatsoever, and turn over money to these people.
WHITFIELD: And quickly, Internet fraud is another pretty self- explanatory -- you probably get something in your e-mail, and then investment seminars. Buy, when someone sees an ad, or perhaps they get a telephone call from someone, hey, we want to give you some advice, don't most people bite?
COX: Well, they do. And the people who are making the money are the people putting on these seminars. Any legitimate stockbroker and adviser can give you this advice for free.
WHITFIELD: So what are the red flags? When you get a phone call from someone who says, hey, we want to help you out, or you see an ad, what are the red flags?
COX: One of the most immediate red flags is a promise of a very high rate of return. When someone is promising you a can't-miss return of 12 percent, 18 percent, even 20 percent, you should know that there is something very suspicious about this. WHITFIELD: And how are a lot of people identified? Sometimes they may get a telephone call from one of these outfits. How do their phone numbers even get out there? How do these folks know how to find them?
COX: These telemarketers are very crafty in how they reach people, and they particularly target senior citizens who they know may be living on the returns from their investments, looking for better returns, have money in the bank and in savings, and they know to target these people. They know how to get them. And these people should know that every state has a commissioner of securities. They should use that securities commissioner as a resource to find out, No. 1, are these people even licensed to sell you investments?
WHITFIELD: Wow, Cathy Cox, Georgia state secretary of state, thanks very much for joining us.
COX: Thank you.
WHITFIELD: So if it sounds too good be true, it probably is.
COX: Probably is.
WHITFIELD: That old adage. We all know it. All right. Thanks a lot.
COX: Thank you.
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