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SEC, FINRA Warn of Investment Scams Related to Hurricanes Harvey and Irma

September 29, 2017 Blog

“It may not be possible to predict when the next natural disaster will take place. What you can count on is that when it happens, scammers will try to take advantage of the situation.”

These words from the Financial Industry Regulatory Authority (FINRA) underscore one of the hidden risks associated with the recent hurricanes that ravaged the southern and southeastern United States. As millions of residents begin the slow and difficult process of recovering from Hurricanes Harvey and Irma, individuals nationwide unfortunately need to be wary of the risk of falling victim to investment fraud.

Following Hurricanes Harvey and Irma, both FINRA and the Securities and Exchange Commission (SEC) issued alerts warning of possible storm-related scams. Individuals who receive unsolicited offers for investment opportunities related to these (or any other) storms should be extremely cautious about investing and know the steps they can take to confirm an investment’s authenticity. As FINRA warns:

“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 or crowdfunding investments associated with clean-up, rebuilding and breakthroughs in science and technology that purport to address current and future flood-related issues.”

FINRA and SEC Tips for Avoiding Harvey and Irma Recovery Investment Scams

Aside from knowing that you need to be skeptical, what else can you do to prevent yourself from falling victim to an investment fraud scam? FINRA and the SEC offer these tips for individual investors:


  • Be Wary of Unsolicited Offers. “Never rely solely on information received in an unsolicited email, text message, or cold call from an ‘analyst’ or ‘account executive.’”
  • Dig Deeper. “Most unsolicited stock recommendations involve stocks that can’t meet the listing requirements of The Nasdaq Stock Market, the New York Stock Exchange or other U.S. stock exchanges. . . . Check the SEC’s EDGAR database to find out whether the company files with the SEC. . . . But remember, the fact that a company that has registered its securities or has filed reports with the SEC doesn’t mean that the company will be a good investment.”
  • Understand What Is (and Isn’t) Valuable Information. “Pitches by con artists frequently . . . use . . . facts from respected news sources to bolster claims of a price run-up; mentions of contracts or affiliations with federal agencies or large well-known companies; standard corporate developments presented as major events; . . . and pressure to invest immediately.”

From the SEC:

  • Ask Questions. “One of the best ways to avoid investment fraud is to ask questions. Be skeptical if you are approached by somebody touting an investment opportunity. Ask that person whether he or she is licensed and whether the investment they are promoting is registered with the SEC or with a state.”
  • Know the Signs. “Know that promises of fast and high profits, with little or no risk, are classic signs of fraud.” Learn about other red flags for investment fraud.
  • Resist Temptation. “Take a close look at your entire financial situation before making any investment decision, especially if you are a recipient of a lump sum payment. Remember, your payment may have to help finance your recovery as well as last you and your family for a long time.”

Zamansky LLC | FINRA Attorneys for Investors Nationwide

If you would like more information about protecting yourself against investment fraud, you can contact Zamansky LLC for a free consultation. We represent investors in FINRA arbitration nationwide. To speak with an experienced investment fraud attorney in confidence, please call (212) 742-1414 or inquire online today.