James Langton
Citing a surge in complaints and tips about investment scams, the U.S. Securities and Exchange Commission (SEC) is warning investors to be on “high alert.”
The SEC issued an investor alert, saying that it has “recently experienced a significant uptick” in reported investment scams.
“Fraudsters use times of uncertainty and change, such as the current Covid-19 pandemic, to lure victims,” the regulator said.
The SEC’s Office of Investor Education and Advocacy warned investors to be on guard against Ponzi schemes, pandemic-driven “pump and dump” scams, and affinity frauds in particular.
The SEC also noted that it has brought several enforcement actions involving companies making claims about their ability to profit from the pandemic, and that it’s aware of stock promotions using social media, email spam, and cold calls to try and drive investor buying.
James Langton
Citing a surge in complaints and tips about investment scams, the U.S. Securities and Exchange Commission (SEC) is warning investors to be on “high alert.”
The SEC issued an investor alert, saying that it has “recently experienced a significant uptick” in reported investment scams.
“Fraudsters use times of uncertainty and change, such as the current Covid-19 pandemic, to lure victims,” the regulator said.
The SEC’s Office of Investor Education and Advocacy warned investors to be on guard against Ponzi schemes, pandemic-driven “pump and dump” scams, and affinity frauds in particular.
The SEC also noted that it has brought several enforcement actions involving companies making claims about their ability to profit from the pandemic, and that it’s aware of stock promotions using social media, email spam, and cold calls to try and drive investor buying.
Fraud on the Rise
Chances are you or someone you know has received an unsolicited and sketchy phone call about how to get rid of student loans, a great deal on health care benefits, or some alleged banking problem that you supposedly need to take care of immediately. Hopefully, you quickly identified it as a scam and hung up. But even those who think they can spot a fraud from a mile away need to keep up their guard, especially now.
Knowing that some people might be desperate to make up for income lost as a result of the pandemic, fraudsters are working overtime to target and try to steal your hard-earned money through securities fraud.
Dec. 14, 2020
The SEC has recently experienced a significant uptick in tips, complaints, and referrals involving investment scams. The SEC’s Office of Investor Education and Advocacy urges investors to be on high alert in order to protect themselves and others from becoming victims of investment fraud.
Fraudsters use times of uncertainty and change, such as the current COVID-19 pandemic, to lure victims into investment scams. Below are tips to help you recognize and avoid frauds like Ponzi schemes, fake CD scams, bogus stock promotions, and community-based financial scams.
Watch Out for Ponzi Schemes
In a Ponzi scheme, fraudsters use money from new investors to pay existing investors. What appears to be a return on your investment is actually money from other investors who have been swindled. Look out for these hallmarks of a Ponzi scheme:
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