The SEC’s Office of Investor Education and Advocacy (OIEA) urges investors to be on the lookout for investment scams related to natural disasters, including recent hurricanes Helene and Milton.
Fraudsters often seek to use disasters and other events, such as hurricanes, floods, oil spills, and wildfires, to lure victims into investment scams. These frauds may directly target individuals receiving money from insurance companies or other sources.
These investment frauds can take many forms. For example, fraudsters may:
- Ask you to make “investments” in companies supposedly involved in cleanup, repair, and recovery efforts;
- Say your “investment” will not only make you money, but benefit victims of the disaster; or
- 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 in what 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 text or 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 natural disasters. 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.
Also know that the promise of high guaranteed returns with little or no risk is a classic sign of an investment scam.
Protect Your Money
Take a close look at your entire financial situation before making any investment decision. If you received a large payment or lump sum to assist with recovery efforts, read our publication Lump Sum Payouts: 8 Steps to Take to Make the Most of Your Money. Remember, your payment may have to help finance your recovery as well as last you and your family for a long time.
Additional Resources
- Don’t be Fooled by Fraudsters Offering “Charitable” Investments -- Investor Alert
- Ponzi Scheme webpage
- Affinity Fraud webpage
- Protect Your Investments webpage
- Saving and Investing: a Roadmap to Your Financial Security through Saving and Investing (also available in Spanish)
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.