The Securities and Exchange Commission is warning small businesses and individuals to watch out for fraudsters out there that may be targeting the recipients of BP oil spill payments with investment opportunities that promise high returns at little or no risk or involve complex or secretive strategies. Because of their tendency to share information with each other and the high level of trust that exists among its members, professional organizations, ethnic communities, religious groups, and other close-knit affinity groups may be likely targets.
The SEC says that one way to avoid becoming involved in this type of investment fraud is to ask lots of questions and then double check the with the agency or an unbiased source. Also. it is important to make sure that the investment is registered and the seller is licensed.
According to SEC Chairman Mary Schapiro, “We are on the lookout for any securities scams in the Gulf area.” Following Hurricane Katrina, the SEC discovered a number of scams targeting individuals that were compensated by their insurance companies. Fraud schemes included promoters claiming that their companies were taking part in clean-up efforts, trading programs that made false promises of high returns, and Ponzi scams.
SEC Warns of Potential Investment Scams Targeting Recipients of BP Oil Spill Payouts, SEC, October 13, 2010
Investor Alert – BP Payout Recipients: Be on the Lookout for Investment Scams
Our Texas stockbroker fraud lawyers represent investors that suffered financial losses through Ponzi scams, affinity schemes, senior financial fraud, broker misconduct, and other forms of securities fraud. We are committed to helping our clients recoup their investments. Contact Shepherd Smith Edwards & Kantas LTD LLP today.