SEC Blows Whistle on Scam Investment Houses

The list of fraudulent brokerages, securities firms and even financial regulators just keeps getting longer. Hundreds, potentially thousands, of scam artists are on the prowl, looking to pick the pockets of investors who don’t double check a company’s on the up and up.

The U.S. Securities and Exchange Commission (SEC) announced the names of scammers it added to its Public Alert: Unregistered Soliciting Entities (PAUSE) list that companies and individuals need to be aware of. The list includes 30 entities that either aren’t registered with the SEC or have presented themselves as someone else to potential investors.

PAUSE entrants may fit into one or more of three categories:

• unregistered solicitors that falsely claim to be registered, licensed, and/or located in the U.S.
• fictitious regulators that claim to be a governmental agency or international organization that doesn’t exist and attempts to acquire info from potential victims, and
• impersonators of genuine firms that use a legitimate entity’s name, address, registration number or website likeness (deepfakes are a growing threat).

5 Signs a Scam is in the Making

The SEC warns fraudsters are luring victims through social media, and using the names of friends of colleagues to lure folks into trusting them. “These relationship confidence scams are sometimes referred to by a term that is as unpalatable as the fraudsters’ conduct — ‘pig butchering scams,'” warns the SEC.

Here are five common strategies scam artists are using today:

• connecting on social media platforms, including dating sites, or through a supposedly accidental text message, and then working to gain trust
• exploiting the hype around emerging technologies such as AI
• impersonating trusted sources, including government agencies like the SEC
• pumping up the price of a crypto asset and then selling at the victim’s expense, and
• demanding additional fees that they claim will allow victims to withdraw from their accounts or recover losses.