Regulatory organization for brokerage industry warns of imposter schemes involving financial advisors
Earlier this summer, the Canadian Securities Administrators (CSA) published notices warned of online investment scams that used “spoofed” websites mimicking well-known financial companies to trick unwitting investors. Just over a month later, the CSA issued another alert, this time saying it had received reports of fake emails that appeared to come from its domain and sought to get recipients’ personal or confidential business information.
Now it seems advisors have to more to worry about, if reports coming from the U.S. are any indication.
As reported by Barron’s, federal and state regulators recently issued warnings of an uptick in imposter schemes involving financial advisors. Among the methods reportedly used by scammers is the use of fake websites that use the names and professional details of real advisors to collect personal data or money from investors.
Last week, Texas regulators issued a cease-and-desist order against Oscar Hill, a Texan whom they say registered a website for Prestige Assets Mgnt LLC, an unlicensed dealer with a suspiciously similar name to Prestige Asset Management LLC, an Austin-based RIA.
“The phony website had an authentic look, including a map to the real firm’s office and referenced the registered firm’s CRD number,” Barron’s said, citing regulators.
In another investor warning, U.S. self-regulatory organization Finra said it had detected two patterns of fraud that investors and advisors ought to be aware of. In one strategy, fraudsters set up a website that copycats an actual professional’s site, then they solicit investments from consumers and direct them to the imposter site. Investors were told to watch out for red flags such as “poor grammar, misspellings, odd or awkward phrasings, or misuse of investor terminology.”
The other scam, Finra said, saw a fraudster cherry-pick an experienced registrant with a clean record, then spoof a phony version of that advisor’s BrokerCheck report including their name and CRD number. That was included in email solicitations to potential customers, which asked people to send photos of their driver’s license and other confidential data.
“Unfortunately, it is nearly impossible to prevent fraudsters from using public information to build a fake profile,” Steve Swicegood, CFP and president-elect of The Alliance of Comprehensive Planners, told Barron’s. “We can, however, be diligent about protecting our names and business reputations by taking a few easy steps.”
To help ensure their digital personas aren’t being hijacked, advisors can set up Google Alerts to send emails when their name or company’s name shows up in published websites, articles, or pictures that they don’t recognize, Swicegood said.
“You can also do periodic Google image searches to see if your logo or personal pictures are being used somewhere unexpected,” he added, stressing that advisors should notify securities regulators in their jurisdiction if they suspect that type of fraud is at play.
