Scammers have begun using official-looking letters and e-mails that supposedly come from the Financial Industry Regulatory Authority to steal money from investors, Finra warned Friday.
The investor alert issued by the agency warns investors about the fraudsters who are asking for money in advance for fraudulent investments.
Recently, financial fraudsters used Finra’s name and logo in correspondence—including a fake signature from authority president and CEO Robert W. Cook—to create the false impression that Finra provided guarantees for an investment that was, in fact, an advance-fee scam, Finra said.
"Financial fraudsters go to great lengths to appear legitimate, making it difficult for investors to recognize their ruses," said Gerri Walsh, Finra's senior vice president for investor education, in a statement. “That's why we are telling investors flat out that Finra does not guarantee investments, and our officers play no role in facilitating investment opportunities. We want people to know that and to understand how they can verify who the real Finra is."
A common advance-fee scam involves enticing investors into sending money to cover administrative or regulatory charges associated with a buyback of shares of stock that are currently virtually worthless or underperforming, the statement said.
“Once investors send the money, they never see it again, nor any of the money promised from the stock buyback. Sometimes, the con artist will ask for additional money or simply disappear,” Finra added.
The agency said one investor who filed a complaint said he received an official-looking letter, purportedly from Finra's CEO, touting a guaranteed investment. The letter contained numerous telltale signs of fraud, including the use of quasi legal language throughout the document, repeated use of the word “guarantee,” an incorrect name for Finra and incorrect Finra leadership titles.
In another instance, investors received e-mails supposedly from Cook notifying potential victims that "approval has been granted for the release and payment of your outstanding inheritance fund," Finra said. In some instances, the victim is asked to fly to another country outside the jurisdiction of the United States and to provide passport information in order to claim the inheritance.
"If you're unsure whether an investment solicitation is legitimate, do your own independent search for the official number for the government agency, office or employee and call to confirm its authenticity," Walsh added. "Cons lie, and they will lie about their affiliations to convince you to send them money or to collect your personal information."
Finra offers a “Scam Meter” tool to help investors assess whether an opportunity is too good to be true. It also has a Risk Meter, which determines whether investors share characteristics and behavior traits that have been shown to make them particularly vulnerable to investment fraud.