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HELENA - State officials say investors have a responsibility to know who's managing their money and how.

At least 35 people from Montana lost more than $18 million in the alleged Bernard Madoff pyramid scheme. Clients of the New York investor have claimed losses of $50 billion.

Lynne Egan, chief of securities examinations and licensing with the Montana Auditor's Office, said the Madoff case shows that it's important for investors to vigilantly track their investments and thoroughly research investment advisers and firms before handing over their money.

"I've heard a lot of people tell me that they are not even opening their statement. They're tired of seeing the bleeding. They're tired of looking at the drop in the value of their 401(k) plan so they're putting their head in the sand," Egan said.

"This is not a time to do that."

Egan said most of the Montana investors known to be affected by the Madoff case were clients of a Bozeman-based investment adviser who is under investigation.

She would not disclose the adviser's name because of the investigation but said the adviser was licensed with the state.

State Auditor Monica Lindeen said one of the first lines of defense investors have before forging a relationship with a new investment adviser is calling her office.

"When somebody does have an issue with an investment or an investor, and they think that there's been wrongdoing or fraud, it's not always evident who to call," Lindeen said.

"The state auditor's office is the office to call, and we can be a resource for them, not only in terms of if there has been potential fraud in their investments, but also on the front end. When people are making their investments, they need to utilize this office as well."

Egan said there are 700,000 licensed securities salespeople in the United States. Of those, 70,000 are licensed to sell securities in Montana.

She said the auditor's office has access to a detailed database that can provide potential investors with critically important information about all licensed - and some unlicensed - investment advisers.

"Is this person licensed in the state of Montana? If they're not, they shouldn't be doing business in Montana. We can also look at the product, as well. We can look at investment advisers and say, 'are there complaints against that adviser?'" Lindeen said.

"The last thing a person should do is just hand over their money to somebody without really, truly understanding if this person is going to take good care of it."

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