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Investors Warned of Potential Hurricane Sandy Investment Scams

Marnie C. Lambert, Esq.

An investment fraud lawyer talks about a recent article that warns investors of the potential for online investment scams involving Hurricane Sandy.

A recent article from USA Today carries an important warning for investors across the nation in the wake of Hurricane Sandy. Investment scams, particularly online investment scams, can - and do - run rampant after natural disasters.

The article warns that Hurricane Sandy is probably the first natural disaster in the US since the widespread use of social media has taken hold, and a flurry of online investment scams related to the catastrophe are considered likely.

Heath Abshure, president of the North American Securities Administrators Association, believes that online investment fraud is a rising threat to investors. Abshure reminds investors that “You can't look in the eyes of the person that is on the other end of the computer. You can't reach out and be sure that what they are telling you is or is not true.” Investors should keep in mind that, as always, promoters offering “risk free” returns and pressuring you to buy now should be treated skeptically.

Although there are many types of scams that may accompany a natural disaster, investors should take particular care when dealing with any investment opportunity that claims it will somehow benefit cleanup or rebuilding efforts in the affected area. Although not every offer of this nature is necessarily a scam, it is a common avenue for post-disaster fraud.

Investors may find that their best option is to ignore any unsolicited online investment offers related to Hurricane Sandy, at least for now. If a Sandy-related investment seems legitimate, be sure you engage in careful research to verify what you’ve been told and check with your state and federal regulators.