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Natural Disasters and Investment Scams – Investor Alert

The SEC’s Office of Investor Education and Advocacy (OIEA) urges investors to be on the lookout for scams related to the recent Hawaii wildfires.

Bad actors may use natural disasters, including the recent Hawaii wildfires, to lure victims into investment scams.  These frauds may directly target individuals receiving money from insurance companies or other sources.  They can take many forms.

  • Bad actors may direct you to make “investments” in companies supposedly involved in cleanup, repair, and recovery efforts. 
  • They may say your “investment” will not only make you money, but benefit victims of the disaster.
  • They may promote the stock of companies that supposedly will reap huge profits from recovery and cleanup efforts, and then sell their own shares of the stock at the inflated price.  This is called a “pump-and-dump” scam.

Fraudsters may attempt to reach individuals on a large scale through unsolicited emails, on social media, or by telephone.  They also may falsely claim to be affiliated with state and federal governments or large, well-known companies.

Be Skeptical and Ask Questions

Be skeptical if you are approached by someone touting an investment opportunity related to the Hawaii wildfires.  When considering any investment, one of the best ways to avoid investment fraud is to ask questions.

  • Ask the person if they are licensed and if the investment is registered with the SEC or with a state regulator.
  • Use Investor.gov’s free and easy search tool to check the background, including license and registration status, of anyone who tries to sell you an investment.

Remember that a promise of high guaranteed returns with little or no risk is a classic sign of an investment scam like a Ponzi scheme

Protect Your Money

Take a close look at your entire financial situation before making any investment decision, especially if you received a large payment to assist with recovery efforts. Remember, your payment may have to help finance your recovery as well as last you and your family for a long time.

Additional Resources

Report possible securities fraud to the SEC online at www.sec.gov/tcr.

Call OIEA at 1-800-732-0330, ask a question using this online form, or email us at Help@SEC.gov.

Visit Investor.gov, the SEC’s website for individual investors.  
       
Receive Investor Alerts and Bulletins from OIEA by email or RSS feed
 


This Investor Alert represents the views of the staff of the Office of Investor Education and Advocacy.  It is not a rule, regulation, or statement of the Securities and Exchange Commission (“Commission”).  The Commission has neither approved nor disapproved its content.  This Alert, like all staff statements, has no legal force or effect: it does not alter or amend applicable law, and it creates no new or additional obligations for any person.

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