Securities Fraud Lawyers Blog
While investors should always be alert and even skeptical of unsolicited communications about their investments, an SEC investor alert from November 19, 2021, further highlights how important this vigilance is.
According to the alert provided by the SEC’s Office of Investor Education and Advocacy (“OIEA”), the SEC has received reports of several individuals receiving communications from people posing as SEC personnel. Whether these communications come in the form of emails, phone calls, or letters, the SEC warns investors that they are “in no way connected to the SEC.” [1]
The fraudulent phone and voicemail messages are particularly misleading because they come from phone numbers that appear to be connected to the SEC. [1] The communications have targeted victims by raising investment-related concerns, such as “suspicious activity” in both checking and cryptocurrency accounts.[1]
In raising these false concerns, the fraudulent callers solicit personal information as well as payments for alleged SEC enforcement actions. In some cases, the fraudsters may even impersonate a particular SEC employee in an effort to gain trust from their victims. As such, the OIEA urges investors to independently verify the identity of anyone claiming to be an SEC or other government employee. [1]
The alert also offers several ways to verify whether a communication is actually coming from an SEC employee. First, you can check with the SEC’s personnel locator in order to get in direct contact with the staff member who purportedly reached out from the SEC. The phone number is (202) 551-6000, which can be used to speak directly with SEC staff members to confirm whether they contacted you. [1]
In addition, concerned investors can also call (800) SEC-0330 or email help@SEC.gov to verify whether a communication truly came from the SEC. It is critically important to verify using one of these methods before providing personal information or any form of payment in response to an unsolicited communication claiming to come from the SEC. [1]
In responding to this impersonation scheme, the SEC also unequivocally noted that its employees do not make unsolicited contact with members of the public and do not solicit payments or seek personal information outside the bounds of formal enforcement actions. Furthermore, the SEC asks that anyone who receives a communication falsely appearing to be from the SEC submit a complaint to the SEC’s Office of Inspector General. [1]
Beyond this particular fraudulent scheme, the SEC has released several similar investor alerts in recent years. In general, impersonations of SEC and other government staff target victims who may trust the communication due to the seemingly serious nature of the communications and the illusion that the communications have come from trustworthy government actors.
In 2018, the SEC discovered instances of social media accounts impersonating the SEC and urged investors to independently verify that any social media account they engaged with and which purported to be connected to the SEC was in fact SEC-affiliated.[2] The SEC also reminded investors that per their policies, no SEC official would discuss nor endorse specific investments over social media. [2]
In our increasingly connected world, investors are encouraged to remain vigilant and skeptical of unsolicited communications asking for personal or financial information. And as always, please reach out to your trusted advisor or attorney at Savage Villoch Law with any questions or concerns.
Sources:
[1] https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-alerts/beware-0
[2] https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-alerts/investor-11