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Warning: Fraudsters posing as Brokers or Investment Advisers

The Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy (OIEA) with the FBI Criminal Investigative Division recently issued a cautionary statement. The alert warns of fraudsters posing as brokers or investment advisers.

Below are different tactics that fraudsters use to mislead and steal from investors:

1. Spoofed Websites

Scammers may register look-alike websites or URL addresses of registered investment professionals or firms. If you are an unsuspecting investor, you may not realize that they are operating under the guise of a legitimate investment firm.

2. Fake Social Media Accounts

This is an old trick that fraudsters use to impersonate a registered investment professional on social media. Once they create such a profile, they message potential investors and manage to lure them into paying cash.

3. Unsolicited Calls from High-Pressure Salespersons

Fraudsters have a habit of making random or calculated calls to investors. Operating from boiler rooms or call centers, their role is to cold-call investors to get them to part with money. When on-call, the team claims to be working for a company you may or may not be familiar with.

4. Falsifying Or Misrepresenting Documents

To confirm if an investment opportunity is real or fraudulent, check the SEC’s website for registration information and look at Form D records. Verifying documents can help you avoid fraudsters masquerading as firms registered with the


How Investors Can Protect Themselves

Verify The Identity of The Person Offering an Investment

Sellers to investors must register with the SEC or the state securities regulator. So, investors can use to check if the seller is legitimate.

The next step is to reach out to the seller on verified contacts. For example, the contact details available at the Client Relationship Summary to ensure they are genuine.

Be on the lookout for:

a) Promise of unimaginable high investment returns

b) Unsolicited offers

c) Suspicious payment methods;

i. Wire transfers and checks to an individual, different firm and address, or unrelated payment purpose

ii. Use of credit cards or digital asset wallets and cryptocurrencies


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