Once again our financial system has been jarred, this time by the seemingly fraudulent actions of ESM Government Securities Inc. of Fort Lauderdale, Fla. It has caused ripples across the country that have reached state-chartered savings and loan institutions in Ohio, as well as municipal entities in various states.

Who would have thought that the misdeeds of a so-called "government bond dealer" could possibly affect bondholders of issues from Beaumont, Tex.; Pompano Beach, Fla.; Toledo, Ohio; Clallam County, Wash.; Clark County, Nev., and Harrisburg, Pa.?

The extent of the damage is not fully known at this time, but greed and stupidity on the part of the public officials in those areas (just to gain an extra one-quarter of 1 percent on a "riskless" transaction) certainly short-circuited their reasoning.

There are lessons in this unfortunate situation for individual investors. The basic premise for all bond buyers should be to protect one's principal. Unfortunately, part of doing this is to know the person and the firm with whom you are doing business.

Is the firm a long-established, reliable securities firm with a good reputation? Does your broker, who is buying and selling securities for you, have your best interests at heart? Are you buying securities that best suit your own personal situation?

These questions may seem elementary, and they are. But don't forget: A broker only makes money when you buy or sell securities; and further, brokers take their direction from their clients.

What do you know about the bonds you are buying? So they are insured and rated AAA. What do you know about the underlying credit of the issue that is insured, and what do you know about the outfit that is doing the insuring? As far as being rated triple-A, don't forget that the Washington Public Power Supply System issues were once triple-A.

And what about the mutual funds you buy? Have you taken the time to read the prospectus? Do you know what the goals or objectives of the funds are -- what credits they can buy; what their track record is; do they have credit analysts of their own or do they depend on Wall Street for their credit work?

And what about the financial institutions that you keep your money market deposit accounts and nonnegotiable certificates of deposit with? How strong are they financially? Are your deposits insured? And if your money is deposited in S&Ls, by whom are they insured?

It never ceases to amaze me how hard people work for their money, and how easily they are willing to blow it away. So the lessons to be learned begin with you, the investor. Ask questions, read and understand what you are doing. And if you are afraid to ask questions, just buy U.S. Treasuries; at least you will sleep well at night -- hopefully.

It is nice to trust someone, but brokers make honest mistakes, too. So it is incumbent upon investors to prepare themselves for investing their hard-earned money.

The Treasury will offer three issues this week. A 4-year note on Tuesday, a 7-year note on Wednesday and a 20-year bond on Thursday. All three will come in minimum denominations of $1,000 and they should return 11.35 percent, 11.85 percent and 12.15 percent respectively.

These issues may be subscribed to at no cost by going to the U.S. Treasury in Washington, or to one of the Federal Reserve banks or their branches. Financial institutions and brokerage houses will subscribe to the issues for you, but they charge a fee.