Late last month, the North American Securities Administrators Association
(NASAA) sent a Cease-and-Desist letter to the operator of the "State
Securities Commission" website, a website the NASAA alleged misappropriated
NASAA content in order to dupe investors.
The website was likely launched in October. Jack Herstein, NASAA President
and Assistant Director of the Nebraska Department of Banking & Finance
Bureau of Securities, said NASAA had no affiliation with the copycat website,
and is "concerned that con artists are attempting to cash in on our
reputation for effective investor protection to lure others into an illicit
While it appears the website is no longer active, whoever ran it isn’t
the only con artist using fake regulator websites to scam investors.
"Several fake regulator websites have been brought to the attention
of state and federal securities regulators in recent years," Herstein
said in a press release. "Many of these sites purport to offer relief to investors. In reality,
they are fronts for con artists posing as regulators."
Investors who want to protect themselves from fake securities regulator
scams need to be especially vigilant online. "Cons will go to great
lengths to make themselves appear legitimate," said Herstein.
The best way for investors to avoid this type of financial fraud is to
make sure they know who they’re dealing with. Investors looking
for information on a particular broker, adviser, or security can always
request information through the
FINRA. Anyone who needs to contact their state securities regulator directly
can find a verified
list of contact information for all 50 states on the NASAA’s website.
Investors should also be aware that regulators do not ask for personal
account information or money. Many of the fake regulator scams claim that
investors can access a Securities Investor Protection Act claim form for
broker-dealers in liquidation by sending in their financial account documentation
and a check. A legitimate regulator would not request this type of information.
"Requests to submit personal account information and money to a ‘regulator’
are red flags of investment fraud," Herstein said.