SEC Joins FINRA in Warning Investors of Impersonation Scams

While the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) routinely issue alerts warning investors of new trends in investment fraud scams, it is not often that they highlight the same risks at the same time. But, in recent months, FINRA and the SEC have both issued alerts calling attention to a wave of impersonation scams targeting individual investors.

Investor Alerts: Impersonation Scams are On the Rise

FINRA’s Investor Alert came first. In February, FINRA warned that scam artists were, “us[ing] FINRA’s name and logo in correspondence – including a fake signature from FINRA President and Chief Executive Officer Robert W. Cook – to create the false impression that FINRA provided guarantees related to an investment opportunity that was, in fact, an advance-fee scam.” At the time it issued the Alert, FINRA had received inquiries from investors who had been targeted in two separate, but similar, types of impersonation schemes. FINRA’s Senior Vice President for Investor Education warned:

“If you’re unsure whether an investment solicitation is legitimate, do your own independent search for the official number for the government agency, office or employee and call to confirm its authenticity. . . . Cons lie, and they will lie about their affiliations to convince you to send them money or to collect your personal information.”

Subsequently, the SEC issued its own Investor Alert, entitled, SEC Impersonators Pretend to Help Investors Buy Stock. In the Alert, the SEC makes clear that it does not offer any services related to evaluating or conducting individual investment transactions:

“If you receive an email or phone call claiming to be from the SEC to ‘confirm’ your purchase of a security or to help you trade a stock, it is likely a scam. . . . The SEC does not contact investors to confirm trades, set up trading accounts, or record the details of trades. Federal government agencies, including the SEC, do not endorse or sponsor any particular securities, issuers, products, services, professional credentials, firms, or individuals. Any correspondence you receive purportedly from the SEC confirming a specific securities transaction is a red flag of fraud.”

What to Do if You Gave Your Account Information or Sent Money to an Impersonator

If you believe that you may have been targeted in an impersonation scam, it is important that you take legal action promptly. The sooner you act, the better your chances will be of recovering your investment. While FINRA and the SEC have both seen a recent uptick in these types of scams, they are not new. The SEC issued similar alerts in 2015 and 2016, and we have seen numerous cases of investors unknowingly falling victim to sophisticated impostors. Regardless of when you invested, you owe it to yourself to seek professional help, and we encourage you to contact us promptly for a free and confidential consultation.

Schedule a Free and Confidential Consultation at Zamansky, LLC

If you would like to speak with an attorney about recovering your losses from an impersonation scam, please contact us to schedule your free initial consultation. To discuss your case with an investment fraud attorney at Zamansky, LLC, call (646) 663-5628 or inquire online today.