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SEC and FINRA Issue Warnings about Broker and Investment Advisor Imposter Scams

October 22, 2021 Blog

The U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) have both recently issued warnings about broker and investment advisor imposter scams. These scams involve individuals falsely representing themselves as registered brokers and advisors—often by assuming the identity of a legitimate registered investment professional. For individuals who fall victim to these scams, hiring a stockbroker fraud lawyer promptly affords the best chance to recover their fraudulent investment losses.

Scam Artists are Using Imposter Websites, Social Media Profiles and Documents to Target Unsuspecting Investors

The SEC and FINRA warn that they have recently seen an increase in cases involving scam artists using imposter websites, social media profiles and investment documents.

Imposter Websites

The SEC notes that, “[f]raudsters may set up websites using URL addresses or names similar to those of registered firms or investment professionals,” and use registered brokers’ and advisors’ photos and registration numbers pulled from online resources. As a result, even when investors attempt to double-check the website’s legitimacy, they may be fooled into believing that the website in fact belongs to the broker or advisor whose photo and registration number are being used.

Given this concern, FINRA encourages investors to look for, “typical mistakes, such as poor grammar, misspellings, odd or awkward phrasings, or misuse of investor terminology.” FINRA also notes that websites that use a registered broker’s or advisor’s name as the URL will be fraudulent in many cases as well—as most brokers and advisors do not have their own professional websites.

Imposter Social Media Profiles

Imposter social media profiles present the same risks and potential red flags. The SEC and FINRA urge investors to be wary of unsolicited inquiries and investment recommendations delivered via social media, as these are almost always fraudulent.

Imposter Investment Documents

FINRA reports that it has seen several instances of scam artists doctoring BrokerCheck reports and other investment documents. Scam artists are taking BrokerCheck reports of legitimate brokers and then modifying them to include the scam artists’ contact information—hoping that investors do not pull the named broker’s report independently. BrokerCheck is a free service that is available to investors online, and FINRA encourages investors to always use BrokerCheck themselves rather than relying on reports provided by third parties.

Are You a Victim of a Broker or Investment Advisor Imposter Scam?

If you believe that you may be a victim of a broker or investment advisor imposter scam, you should take action promptly. Gather all communications and documentation you have, and then contact a stockbroker fraud lawyer to discuss your situation. While successfully pursuing claims against scam artists can be challenging, there are options available, and acting quickly can provide the greatest opportunity to secure a financial recovery.

Speak with a Stockbroker Fraud Lawyer at Zamansky LLC

Our stockbroker fraud lawyers represent individual investors nationwide. To learn about your options for recovering your fraudulent investment losses, call 212-742-1414 or request a free consultation online today.