Investor Alert: Beware of Fake Securities Regulator Scams

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 scheme."

While it appears the website is no longer active, whoever ran it isn’t the only con artist using fake regulator websites to scam investors.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 SEC and 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.


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