FINRA Provides Information and Assistance to Investors
WASHINGTON — Investors should beware of offers to recover money lost from securities investments for an upfront fee, according to an Investor Alert issued today by the Financial Industry Regulatory Authority (FINRA). In particular, FINRA cautions investors who live outside the U.S. that some of these offers may be fraudulent.
"While it's very enticing to hear you might be able to recover money lost from a previous investment or investment scam, some investors end up losing even more money to unregistered con artists who run so-called ‘recovery scams,'" said Gerri Walsh, FINRA's Senior Vice President of Investor Education. "Fraudsters can paint a very credible story to persuade you to send money in advance to get back at least some of what you originally lost. But the sad fact is that the money you send may itself be lost for good."
The alert notes that lists of previous victims are often kept, sold or recirculated, so it is common for scammers to "go back to the well" to try to take more money from a previous victim. Both FINRA and the U.S. Securities and Exchange Commission routinely receive questions and concerns about recovery offers.
Consumers should look for the following red flags:
- Urgent correspondence and high-pressure calls are received from official-sounding organizations that claim to work closely with the U.S. government.
- Callers may impersonate registered securities professionals and brokerage firms. In some instances, these con artists state that they are registered with FINRA and can be verified using FINRA BrokerCheck, a service that allows investors to check registration and other information about securities firms and investment professionals. Beware. These individuals may go so far as to falsely use the name of a real person or firm that is registered with FINRA.
- Once contact is made with the investor and the investor expresses interest, a series of official-looking documents are sent to assure the investor that money is waiting in an account and can be recovered for a fee.
Read the Alert for more information on how to spot and avoid fraudulent "recovery" scams, as well as FINRA's related article on legitimate ways investors can attempt to recover funds or be compensated for losses. The article warns consumers to be wary of unsolicited offers, and this holds true for offers to help recover investment assets.
If you suspect fraud, file a complaint using FINRA's online Investor Complaint Center or call FINRA at (240) 386-HELP (4357).
FINRA, the Financial Industry Regulatory Authority, is the largest independent regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business – from registering and educating all industry participants to examining securities firms, writing rules, enforcing those rules and the federal securities laws, and informing and educating the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers the largest dispute resolution forum for investors and firms. For more information, please visit www.finra.org.