The Securities and Exchange Commission (SEC) today charged an Illinois-based investment advisor with trying to sell fictitious securities, allegedly offering more than $500 billion of the bogus investments on various social media Web sites such as LinkedIn.
"If you are going to make it up, make it big," said Robert B. Kaplan, co-chief of the SEC Enforcement Division's Asset Management Unit.
In its complaint the SEC alleges that Anthony Fields, 54, of Lyons, Ill., used LinkedIn discussions to promote fictitious "bank guarantees" and "medium-term notes." The postings resulted in interest from multiple potential buyers.
Fields made multiple fraudulent offers through his two sole proprietorships -- Anthony Fields & Associates (AFA) and Platinum Securities Brokers -- and provided potential customers false and misleading information about AFA's assets under management, clients and operational history to the public through its Web site and in SEC filings. From the fall of 2010 to the present, the SEC says, Fields made numerous fraudulent offers of fictitious bank guarantees and medium term notes (MTNs) on LinkedIn.
The SEC also alleges Fields failed to maintain required books and records, did not implement adequate compliance policies and procedures, and held himself out to be a broker-dealer though he was not registered with the SEC. Fields last updated his ADV Form with the SEC in February 2005, according to the SEC Web site. He became licensed as a CPA in 1987 but failed to renew his license in 2006.
On March 15, 2010, Fields filed forms with the SEC in which he falsely represented that he had $400 million in assets under management. Additionally, Fields represented that he was managing assets for pooled fund vehicles, companies and high-net-worth individuals. However, AFA never had any assets under management or managed assets for pooled fund vehicles, corporations or high-net-worth individuals, the SEC says.
The SEC has ordered a public hearing will be held in the next 30 to 60 days to review its charges against Fields.
The SEC, in response to increasing social media financial scams, has issued two alerts in an agency-wide effort to highlight the risks investors and advisory firms face when using social media.
The first alert, entitled "Investment Adviser Use of Social Media," provides SEC staff observations based on a review of investment advisors of varying sizes and strategies that use social media. A second alert, "Social Media and Investing: Avoiding Fraud," informs investors of fraudulent investment schemes that use social media, and provides tips for checking the backgrounds of advisers and brokers.
Lori J. Schock, director of the SEC's Office of Investor Education and Advocacy, said more investors are using social media to help them with investment decisions, making them susceptible to such scams.
"Fraudsters are quick to adapt to new technologies to exploit them for unlawful purposes," Kaplan said. "Social media is no exception, and today's enforcement action reflects our determination to pursue fraudulent activity on new and evolving platforms."