FBI warns investors of fraudsters posing as brokers and advisers
The FBI Criminal Investigative Division and Securities and Exchange Commission warn investors of fraudsters impersonating registered investment professionals such as investment advisers and registered brokers.
The end goal of these broker imposter schemes is to lure their targets into investment scams using spoofed sites, fake social media profiles, cold calling, and doctored documents.
This warning was issued in collaboration with SEC’s Office of Investor Education and Advocacy (OIEA), an SEC department designed to help individual investors protect themselves from securities fraud or abuse.
“Fraudsters may falsely claim to be registered with the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) or a state securities regulator in order to lure investors into scams, or even impersonate real investment professionals who actually are registered with these organizations,” the FBI and SEC warned earlier this week.
“Fraudsters may misappropriate the name, address, registration number, logo, photo, or website likeness of a currently or previously registered firm or investment professional.”
FBI and SEC’s warning follows a similar fraud alert issued by FINRA this week regarding broker imposter scams using phishing sites impersonating brokers and doctored SEC or FINRA registration documents.
Investors are advised first to check if those reaching out with investment opportunities are licensed or registered with the Investor.gov search tool and confirm they’re not a scammer by reaching out to the seller using independently verified contact information from the firm’s Client Relationship Summary (Form CRS).
Regardless of whether someone is registered with the SEC or they are only attempting to impersonate a registered investment professional, investors should always check for the following warning signs of an investment scam:
- Guaranteed high investment returns: Promises of high investment returns – often accompanied by a guarantee of little or no risk – is a classic sign of fraud. Every investment has risk, and the potential for high returns usually comes with high risk.
- Unsolicited offers: Unsolicited offers (you didn’t ask for it and don’t know the sender) to earn investment returns that seem “too good to be true” may be part of a scam.
- Red flags in payment methods for investments: credit cards, digital asset wallets and “cryptocurrencies,” wire transfers and checks.
Investors are also urged to check the list of Impersonators of Genuine Firms maintained by the SEC, which—although not exhaustive as it doesn’t include all unregistered entities, impersonators of genuine firms, fake regulators, or SEC-investigated entities—will likely help avoid some investment scam attempts.
If you are the victim or have information on a broker imposter scheme, you can report possible securities fraud to the SEC and online fraud to the FBI’s Internet Crime Complaint Center.
“If you are suspicious about information you receive from an individual or firm soliciting your business, contact FINRA or another regulator BEFORE you send any personal or financial information,” FINRA added.