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Investor Complaints and Questions

FY 2005 Annual Complaint Data

Four-Point Increase in Investor Contacts

During fiscal year 2005 (ending September 30, 2005), the SEC's investor assistance staff received 76,221 complaints, questions, and other contacts - a 4% increase compared with fiscal year 2004.

"Other contacts" includes repeat contacts, contacts with insufficient information to process, and contacts not within our jurisdiction.

Nearly 53% of these contact involved telephone calls, a 9-point increase over last year and a 13-point increase compared with fiscal year 2003.  Approximately 33% came in electronically through our online complaint and question forms or by email, a 7-point decline from last year.  The remainder included letters, faxes, and personal visits.

Complaint Trends

During fiscal year 2005, we received a total of 19,835 complaints (each of which involved one or more entity and one or more type of conduct).  For the second year in a row, the volume of complaints concerning advanced fee fraud and spam rose dramatically compared with other complaint categories.  Because many advanced fee schemes target investors (often non-U.S. residents) who lost money investing in failed companies, the SEC's Office of Investor Education and Assistance issued a new alert entitled Worthless Stock: How to Avoid Doubling Your Losses.  We attribute at least some of the continuing growth of spam-related complaints to the advent of so-called "phishing" scams - which involve the sending of misleading emails to entice the unwary to reveal personal financial information.

The ten most common complaints we received during 2005 included the following:

	Complaint Type	FY 2005 Totals	FY 2004 Totals	Change	Rank in 2004
1	Advance Fee Fraud	2,219	1,263	Up 75.30%	2
2	Spam: Unwanted Emails or Faxes	1,146	623	Up 83.79%	10
3	Transfer of Account Problems	844	789	Up 6.59%	4
4	Account Closing: Problems with Redemption, Liquidation, or Closing	841	710	Up 18.03%	7
5	Manipulation of Securities, Prices, or Markets	741	1,738	Down 57.42%	1
6	Bankruptcy or Issuer Reorganization	728	715	Up 1.68%	6
7	Theft of Funds or Securities	697	661	Up 5.14%	9
8	Unauthorized Transactions	653	803	Down 18.68%	3
9	Account Records: Errors or Omissions	645	577	Up 11.61%	n/a
10	Delivery of Funds or Proceeds	629	502	Up 24.90%	n/a

As in years past, we received more complaints about broker-dealers than any other type of entity (including issuers, mutual fund companies, investment advisers, and transfer agents):