Federal Regulators Issue Warning Regarding Flood-Related Investment Scams
In the wake of natural disasters, many people selflessly volunteer their time and donate money to help those in need. Unfortunately, there are also people who use these tragic events to take advantage of others. Sadly, this is a recurring problem in the United States, and one that has surfaced once again in the wake of the historic rains and subsequent flooding in Louisiana this summer.
On August 22, 2016, the U.S. Securities and Exchange Commission (SEC) issued an Updated Investor Alert warning of investment scams relating to the Louisiana floods. Specifically, the SEC warns of fraudulent “investment opportunities” involving:
- Individuals promoting stocks of companies that will supposedly earn significant profits from involvement in cleanup and recovery efforts;
- “Pump-and-dump” scams where stock owners in small companies publish false information in order to artificially inflate the value of their stock and then sell before the truth is revealed;
- Trading programs related to flood-related activities that promise substantial returns;
- Ponzi-type schemes where scammers use new investors’ funds to pay earlier investors in fraudulent investments; and,
- Investment scams targeting recipients of lump-sum insurance payouts.
While each of these types of scams has its own unique hallmarks, they all carry the risk for unsuspecting investors to sustain substantial losses.
Protecting Yourself Against Investment Scams
With cleanup and recovery efforts from Louisiana’s floods – and now Hurricane Hermine – likely to continue for months to come, individual investors must remain cautious when evaluating any flood or storm-related investment opportunities. If you have received an unsolicited offer to invest in a company that is purportedly involved in storm-related cleanup or recovery, or if you are independently considering a flood-related investment, here are some considerations to keep in mind:
- Does the investment offer low risk and high returns? If so, there is a good chance that it is a scam.
- Is the individual offering the investment licensed and registered? You can check for free
- Can you get answers to your questions? If someone wants you to invest without the information you need in order to make an informed decision, this can be a red flag for fraud.
I Lost Money in a Flood-Related Investment Scam. What Can I Do?
If you recently lost money in a flood or storm-related investment and you suspect that you may be a victim of fraud, it is important that you speak with an experienced investment fraud attorney as soon as possible. There are special procedures designed to help defrauded investors recover their losses and hold unscrupulous investment advisors accountable, but you may need to act quickly in order to maximize your chances of securing a financial recovery. The attorneys at Zamansky LLC represent individual investors nationwide, and we are happy to provide a free assessment of your legal rights.
Schedule a Free Investment Fraud Consultation at Zamansky LLC
For more information about recovering financial compensation for your fraudulent investment losses, contact Zamansky LLC for schedule a free, confidential consultation. Call (212) 742-1414 or contact us online to schedule an appointment with one of our experienced investment fraud attorneys today.