The SEC’s Office of Investor Education and Advocacy (OIEA) is warning investors about investment schemes where fraudsters misrepresent that they work for the SEC and pretend to help investors purchase stock or confirm trades – but really just steal investors’ money. If you receive an email or phone call claiming to be from the SEC to “confirm” your purchase of a security or to help you trade a stock, it is likely a scam. Do not send them money or give them your account information.
The SEC does not contact investors to confirm trades, set up trading accounts, or record the details of trades. Federal government agencies, including the SEC, do not endorse or sponsor any particular securities, issuers, products, services, professional credentials, firms, or individuals. Any correspondence you receive purportedly from the SEC confirming a specific securities transaction is a red flag of fraud.
In some cases, after you have been solicited to buy shares of a stock, you may receive a call or email pretending to be from the SEC to verify or to confirm the transaction. Here’s an excerpt from an actual phone call of an SEC impersonator pretending to help an investor confirm a trade:
“…I’m a senior compliance officer with the Securities and Exchange Commission…my job is to simply verify and confirm the order…so I am confirming a buy order from Mr. [name of person], who is a portfolio manager of [name of firm]…in accordance to the regulations that are set forth by the Securities and Exchange Commission on the U.S. markets, Mr. [name of investor], for the protection of both parties, what I’m going to do is record the details of the trade. It goes on file as a voice audio signature with the Securities and Exchange Commission as a regulated trade. Okay?...and it functions exactly as a fingerprint. It’s non-retractable…do I have your consent to place the order, Mr. [name of investor]?”
You can listen to a snippet of an actual fraudulent call*:
Or even listen to the entire fraudulent pitch*:
*Names and contact information have been bleeped out.
If you are unsure whether correspondence claiming to be from the SEC is authentic, call OIEA at 1-800-732-0330 or email us at Help@SEC.gov. If you have been contacted by someone pretending to be from the SEC, submit a complaint at www.sec.gov/oig to the SEC’s Office of Inspector General (OIG) or call the OIG’s toll-free hotline at (833) SEC-OIG1 (732-6441).
Also know that people who are not licensed or registered commit many of the scams that target retail investors. When someone tries to sell you an investment, the first thing you should do is check whether the person is registered. Investor.gov has a free and simple search tool that allows you to find out if your investment professional is licensed and registered, and if he or she has a disciplinary history or customer complaints.
Additional Information
Investor Alert: Investment Scams Involving Fake Forms 4 (November 2016)
Investor Alert: Beware of Government Impersonators Targeting Fraud Victims (June 2016)
Updated Investor Alert: SEC Warns of Government Impersonators (February 2016)
Updated Investor Alert: Beware of Companies Using the SEC Seal (April 2015)
Report a possible securities fraud.
Visit Investor.gov, the SEC’s website for individual investors.
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The Office of Investor Education and Advocacy has provided this information as a service to investors. It is neither a legal interpretation nor a statement of SEC policy. If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.
