Investor Warning: Some Scammers Pushing Advance-Fee Frauds are Using FINRA's Name

Scammers have a deep arsenal of tactics and tricks they use to prey on unsuspecting investors, and one of the most common and successful is to impersonate a high-profile regulator or top executive with a company. The Financial Industry Regulatory Authority (FINRA), the self-regulatory organization that supervises brokerage firms, recently released a warning to investors about fraudsters who try to add credibility to their offerings by claiming to be associated with FINRA.

In one case, an investor in the United Kingdom alerted FINRA after receiving a detailed document purportedly signed by FINRA’s own Head of Enforcement, Susan Schroeder. Included in the letter were several “guarantees” tied to the registration and conversion of stock shares that would be transferred after the potential investor sent a $28,000 advance payment. In reality, Ms. Schroeder, while indeed holding the position as FINRA’s enforcement chief, had in no way approved the sham offering. FINRA does not offer guarantees on investments, and any investment that promises to be guaranteed is a myth. Fortunately, FINRA quickly identified the offering as fraudulent, and the investor was able to avoid becoming a victim of the scam.

You can find a copy of the fraudulent letter in FINRA’s Investor Alerts here.

Watch Out for Continued and Increasingly Aggressive Communication

Targets of these advance-fee scams are rarely left alone after first contact. Scammers will likely keep in contact with their marks through phone calls, messages, email, and more. While this contact may start out seemingly friendly and professional, the scammer will use the constant communication in an attempt to build a relationship and gain trust. They may use their easy accessibility as a refreshing alternative to the sometimes difficult to reach professional investment advisors working at official firms. However, as time goes on the scammer is likely to become increasingly insistent that you invest in their offerings. They may even send you official-looking documents, but it’s important to remain wary of anyone reaching out to you with an investment opportunity and make sure you aren’t the target of a scam.

If you were the victim of fraud, you may still have legal options available to you. Your best course of action is to contact an investment fraud attorney to discuss your situation and learn more about the potential steps you can take to recover your losses. At Meyer Wilson, our attorneys have spent years working with victims of fraud across the United States, and through our efforts have secured more than $350 million in verdicts and settlements. Call us at 888-390-6491 today to speak with a member of our firm, or send us the details of your case through our online form and schedule a free case consultation.

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