NASAA is pushing cautionary information out to investors and exploring ways to increase their reach to elderly invesors who are experiencing unprecedented isolation due to the quarantines and shelter in place orders and may be prone to abuses relating to sol-called safe or hedged investments that are supposed to guard them against market losses or inflation, he said.
“Past experience tells us that opportunistic scam artists will undoubtedly prey on the fears and concerns of retail investors in the midst of a crisis. Some of the types of frauds and schemes we anticipate seeing are microcap fraud and stock manipulation around the viral crisis and items in demand during the crisis,” Gerold added.
Investors who contact Finra primarily have raise operational issues, Walsh said. For example, some retail investors have found it difficult to reach their investment professionals by phone or to access the firm’s website during periods of heavy market activity. Such challenges likely stem from issues with system’s bandwith issues, Walsh warned.
Other investors have complained about order execution, largely related to pricing discrepancies, especially self-directed investors who encountered order cancellations or had trades executed at prices less favorable than expected because markets were moving so quickly.
A handful of investors who called Finra reported being unable to execute their trades on 401(k) accounts. This however likely resulted from a misunderstanding of trading limitations, Walsh said.
Some investors accounts were frozen and others frozen due to to margin error sellouts, she added.
“The complaints and questions that our call centers team, including securities helpline for seniors, are fielding from individual investors relate more to market volatility than they do to the virus or fraudulent schemes that are using COVID-19 as a hook,” Walsh said.