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SEC Warns Investors to Watch Out for Potential Scams


The Securities and Exchange Commission regularly issues alerts on potential scams and fraudulent activities that investors should be mindful of. Some of these may target certain types of investors or funds, or in one case, someone may be pretending to work for the SEC itself. Here’s a look at some of the investor alerts you should familiarize yourself with.

SEC Impersonators

The SEC recently issued an alert that warns investors to watch out for people claiming to work for the SEC itself. These individuals say they will help investors purchase new stock or confirm a trade when they are just stealing the money. The SEC warns investors that if you receive an email or a phone call from someone claiming to be with the Securities and Exchange Commission, it’s likely a scam. You should not give them any account information or send them money.

The SEC does not reach out to investors directly to set up trading accounts, confirm trades, or record any details of these trades. Federal government agencies never sponsor, endorse, or recommend any particular products, services, securities, firms, or individuals. You can visit the specific investor alert on the SEC’s website to hear an actual recorded fraudulent call.

Ponzi Schemes Targeting Senior Citizens

Senior citizens are at a higher risk from unscrupulous people looking to take advantage of them, and investments are one of these methods. Watch for potential Ponzi schemes that are targeting older investors. Ponzi schemes involve using new investors’ money to pay existing investors. You mistakenly believe your money is a return on investment when it’s in fact someone else’s money who has now been scammed.

You can identify Ponzi schemes by their classic signs, like promising high returns without much risk, sellers that are usually unregistered or unlicensed, and returns that tend to be steady despite market fluctuations. Two known Ponzi schemes targeting senior citizens, where the SEC has taken action, are Lifepay Group, LLC, and Woodbridge.

Investment Scams Related to Hurricanes

As hurricane season rolls around each year, there is typically at least one or more hurricanes that cause significant or catastrophic damage. Other disasters like earthquakes, floods, and oil spills, also bring out the scammers. They are looking for people who receive lump sum payouts from insurance companies and are now looking to invest. Many of these may be Ponzi schemes, or they can be people claiming to promote businesses who are involved in recovery and cleanup efforts.

Retaining a Florida Securities Attorney

If you feel you’ve been the victim of an investment scam or had an investment professional mismanage your assets, you need to speak with a Florida securities arbitration and litigation attorney. These matters are handled differently as there is usually a mandatory arbitration in front of FINRA, the Financial Industry Regulatory Authority. The case is then decided not by a judge, but by a panel of arbitrators. It’s important to retain an attorney who is skilled in securities cases because the process is so different. The attorneys at Rabin Kammerer Johnson have experience in securities arbitrations and we are well-versed in the nuances of these types of legal matters. If you have a current issue with your investments, contact our office today to schedule a consultation.



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