FINRA Warns Investors of Scams Linked to Hurricane Florence

When Hurricane Florence ravaged the coastal Carolinas this summer, it left more than 50 people dead and an estimated $17 billion to $22 billion in damage in its wake. While the southeastern United States has seen more than its fair share of hurricanes in recent years, Florence was among the worst to make landfall, and its effects will be felt for years, if not decades, to come.

Recovery, Charity and Investment Scams Following Hurricane Florence

Unfortunately, for some people, this isn’t enough. The Financial Industry Regulatory Authority (FIRNA) has recently warned that scammers are likely to target victims of Hurricane Florence as well as other individuals who donate to storm-related charities and who are seeking to invest in companies that stand to profit from the recovery process. According to Gerri Walsh, FINRA’s Senior Vice President of Investor Education:

“When a natural disaster strikes, it’s not uncommon for scammers to rush in. In addition to charity frauds, we often see investment scammers try to exploit a variety of hurricane-related opportunities. Investors may become the targets of unsolicited emails, texts, phone calls, messaging apps and social media communications touting high returns, lucrative contracts, cutting-edge technology or other claims tied to prospering in the aftermath of Hurricane Florence.”

FINRA also warns that:

“Financial fraud routinely follows on the heels of disaster. Hurricane Florence and its aftermath are no exception. . . . Don’t be surprised if you receive unsolicited phone calls, emails and texts, including from messaging apps, about investments that exploit a variety of hurricane-related opportunities. Best bets for scams include stocks associated with clean-up, rebuilding and breakthroughs in science and technology that purport to address current and future flood-related issues.”

Warning Signs for Fraudulent Scams

In the wake of a natural disaster, it is human nature to want to protect your property or help others in need. But, while disasters like Hurricane Florence bring out the best in many people, it brings out the worst in others. As a result, FINRA and the Federal Emergency Management Agency (FEMA) are warning storm victims and other individuals to:

• Be cautious of anyone who is soliciting money, either in person, by email or over the phone;
• Be cautious of anyone who is asking for your personal information, your insurance information or information that should already be in the government’s records;
• Seek to confirm the identity of anyone claiming to work for a charitable organization or a federal agency such as FEMA or the Securities and Exchange Commission (SEC);
• Independently research any claims that a particular company has a contract or affiliation with the government for purposes of storm cleanup or recovery; and,
• When in doubt, exercise caution, and do not be afraid to say “no” if you are concerned about the potential for stock or financial fraud.

Speak With a FINRA Arbitration Attorney at Zamansky, LLC

For individuals who lose money in Hurricane Florence-related investment scams, financial recovery may be available through arbitration with FINRA. If you would like to speak with an attorney about your legal rights, please call (212) 742-1414 or request a free consultation online today.