COLUMBIA, S.C. – The Securities Division of the Office of the South Carolina Attorney General is warning investors about a growing number of online schemes in which bad actors are posing as regulatory agencies or impersonating registered individuals or firms in the securities industry. While imposter schemes are not new, fraudsters are utilizing technology to make these schemes more sophisticated and difficult to spot.
Investors should be aware that fraudsters may impersonate a regulator or registered firm by utilizing technology to create a fake website, misrepresent the business location or headquarters, or deceive investors or others in the securities industry by using fraudulent phone numbers. For example, the Securities Division recently issued a Cease-and-Desist Order to individuals claiming to be securities regulators going by the name “Central Trade and Financial Authority” (CTFA). Among other items, the “CTFA” website misrepresented that it was headquartered in South Carolina and listed a fraudulent phone number. The Division determined that it was, in fact, a fictitious entity that used fraudulent regulatory authority to defraud.
“Although the Internet has many useful purposes, not everything on the Internet is what it seems,” says Attorney General Alan Wilson. “Unfortunately, technology has given bad actors more tools to defraud the public, which is why it is important to take steps to verify the identity of individuals or organizations before sending money.”
South Carolinians can take steps to protect themselves by being aware of the tactics that may be used to perpetrate imposter fraud, which may include the following:
If you are suspicious about information you receive from an individual or firm soliciting your business, or if you think you have been contacted by someone impersonating a legitimate entity in South Carolina, contact the Securities Division at 803-734-9916. The Securities and Exchange Commission (SEC) maintains a national list of Impersonators of Genuine Firms. This list is not exhaustive; firms may be impersonated even if they are not on the list. To check the registration status of an investment professional or firm, contact the Securities Division of the Office of the South Carolina Attorney General.