SEC Warns Investors of Social Media Schemes such as Twitter, Facebook & LinkedIn
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:
“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.