On Heels of Alleged $550B Securities Fraud Case, SEC Warns Investors to
Watch Out for Social Media Schemes
What’s the latest in investment fraud? Social media investment scams,
says the SEC. According to the Commission, more and more investors are
turning to social media outlets, including Facebook, LinkedIn, Twitter,
and YouTube, for information on investing. And, as always, where the investors
are, the fraudsters are sure to follow.
Robert B. Kaplan, co-chief of the SEC Enforcement Division's Asset
Management Unit, said SEC investigations are revealing more and more online
investment frauds perpetrated through social media websites.
One such case is the alleged $500 billion offering fraud allegedly perpetrated
by Illinois-based investment adviser, Anthony Fields. The SEC filed charges
against Fields on Jan. 4.
According to the SEC, Fields “used LinkedIn discussions to promote
fictitious ‘bank guarantees’ and ‘medium-term notes.’
The postings resulted in interest from multiple purported potential buyers.”
In a litigation release related to the case, the Commission warned investors
against online investment fraud, and recommended investors take action
to protect themselves from social media investment scams. Most importantly,
the SEC advised investors to:
• Be wary of unsolicited offers;
• Watch out for
• Look out for
• Guard personal information; and
• Ask questions and verify the answers.
“Fraudsters are quick to adapt to new technologies to exploit them
for unlawful purposes,” said Kaplan. “Social media is no exception.”
To learn more about the dangers of crowd funding and other fraudulent web-based
entrepreneurial schemes, read our recent blog post, "Crowdfunding and Online Stock Markets for Startups Opens Door for Investment Fraud."
For additional tips on avoiding online investment fraud and social media
schemes, investors can download the SEC’s fullInvestor Alert, Social Media and Investing: Avoiding Fraud, on the SEC’s website.