The Securities and Exchange Commission today issued an investor alert warning investors that fraudsters were claiming to be SEC employees attempting to trick consumers into sending money or revealing critical account information.
The alert, “SEC Impersonators Pretend to Help Investors Buy Stock,” makes clear that the SEC does not contact investors to confirm trades, set up trading accounts or record the details of trades.
To give investors insight into what an actual scam artist sounds like, the SEC included an audio recording of a real imposter making an official-sounding, albeit fraudulent, pitch, excerpted below:
“I’m a senior compliance officer with the Securities and Exchange Commission … I am confirming a buy order from Mr. [redacted], who is a portfolio manager of [redacted] … in accordance to the regulations that are set forth by the Securities and Exchange Commission on the U.S. markets, Mr. [redacted], for the protection of both parties, what I’m going to do is record the details of the trade. It goes on file as a voice audio signature with the Securities and Exchange Commission as a regulated trade. … It’s non-retractable … do I have your consent to place the order?”
“The audio recording is what fraud sounds like,” said Lori J. Schock, director of the SEC’s Office of Investor Education and Advocacy. “We included the recording in our investor alert so investors can hear the lies and high-pressure tactics imposters use to cheat potential victims out of their money.”
A suspicious investor who suspected fraud and recorded the call sent the audio to the SEC. The investor did not fall for the scam, the agency stated.
The alert also notes that federal government agencies, including the SEC, do not endorse or sponsor any particular securities, issuers, products, services, professional credentials, firms or individuals. “Any correspondence you receive purportedly from the SEC confirming a specific securities transaction is a red flag of fraud,” the alert stated.
The SEC said that investors who are unsure whether correspondence claiming to be from the SEC is authentic should call the SEC’s Office of Investor Education and Advocacy (OIEA) at 1-800-732-0330 or e-mail [email protected]. The office responds to investors’ questions and complaints, engages in educational outreach and provides free investment tools and resources on Investor.gov.
Investors who believe they have been contacted by someone pretending to be from the SEC should submit a complaint form to the SEC’s Office of Inspector General or call that office’s toll-free hotline at 877-442-0854, the alert stated.
In order to protect investors from unregistered brokers and advisors “who commit many of the scams that target retail investors,” the SEC wants consumers to check the registration of investment professionals. “When someone tries to sell you an investment, the first thing you should do is check whether the person is registered. Investor.gov has a free and simple search tool that allows you to find out if your investment professional is licensed and registered, and if he or she has a disciplinary history or customer complaints,” the SEC alert stated.