SEC warns of investment scams related to Hurricane Ida
The US Securities and Exchange Commission warns investors of potential investment scams that leverages Hurricane Ida as a bait.
The US Securities and Exchange Commission (SEC)’s Office of Investor Education and Advocacy is warning investors of potential investment scams related to Hurricane Ida.
Scammers will likely target individuals and organizations that are eligible to receive large payouts from insurance companies to compensate for the damages caused by Hurricane Ida.
In the aftermath of a natural disaster like a hurricane, organizations attempt to earn by investing in companies that provide cleanup and repair services.
Crooks leveraged social networks and spam messages to promise to the victims high returns for investments in small investments in thinly-traded companies that will make huge profits from cleanup and recovery efforts.
“For example, the SEC brought a number of enforcement actions against individuals and companies who made false and misleading statements about alleged business opportunities in light of damage caused by Hurricane Katrina in 2005. Some of those cases involved pump-and-dump scams where fraudsters used bogus “news” to pump up the stock price of small companies so they could sell their own shares at artificially high prices.” reads the alert published by SEC. Fraudsters also may target individuals receiving compensation from insurance companies.”
The SEC warns individuals who receive huge sum insurance payouts to be extremely wary of potential investment scams related to Hurricane Ida.
Individuals must be skeptical and should ask anyone approaching them with an investment opportunity if they’re licensed and if their investment is registered with the SEC or with a state.
It could be quite easy to check their answers by contacting the SEC or the state securities regulator.
“Check out their answers with an unbiased source, such as the SEC or your state securities regulator. Know that promises of fast and high profits, with little or no risk, are classic signs of fraud. Read our short publication Ask Questions before making any investment.” continues the SEC. “Take a close look at your entire financial situation before making any investment decision, especially if you are a recipient of a lump sum payment. Remember, your payment may have to last you and your family for a long time.”
The SEC’s Office of Investor Education and Advocacy is reachable through the phone number 1-800-732-0330 or through the online form.
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