The Financial Industry Regulatory Authority issued an alert warning non-U.S. and U.S. investors about scammers who use fake regulator websites and identities to steal money. Some scammers have even used FINRA’s name or pretended to be employed by the self-regulatory organization.
These fraudsters will typically ask for an advance payment of a service fee and then disappear upon receipt of the money. The fee is supposedly for services that involve buying non-performing stock that already belongs to the person they are targeting with the offer to pay a high price. The fraudster may even pretend to be a securities regulator or industry professional.
According to FINRA, there are investors in the UK who have received phone calls from individuals claiming to be with securities firm that were subject to disciplinary actions by regulators. These callers will typically try to procure advance payment for the return of money that was lost while the investor was associated with the firm.
U.S. investors have also been targeted. The Securities Investor Protection Corporation even issued its own warning against scammers pretending to be the SIPC or another organization with similar powers. SIPC has the authority to keep up a reserve fund for customers of brokerage firms that become insolvent. However firm liquidations that go through SIPC do not require investors to pay a fee so they can recover their monies.
Often, these fraudsters will tell investors involved with a brokerage firm that is in liquidation proceedings that they can give them their money back. When SIPC issued its investor alert late last year, it named two websites that were posing as customer protection entities: Alliant Trust Systems and IAC International.
It is not uncommon for an investor to have regrets over an investment failure, which can make them vulnerable to scams dangling the possibility of getting their money back.
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Well-Traveled Fraud-Advance-Fee Scams Target Non-U.S. Investors Using Fake Regulator Websites and False Broker Identities, FINRA
Beware of “Phishing” Scams Run Through Look-Alike Web Sites Imitating SIPC, SIPC, November 5, 2014