Securities Commission Warns Investors of Threats

The State Office of Securities Commissioners (OSC) reminds Hawaii investors to be cautious of investment schemes that are circulating online and on social media. Most of these investment scams involves precious metals, cryptocurrencies, promissory notes and foreign exchange markets.

According to a survey by the North American Securities Administrators Association, schemes related to those mentioned above are the top threats facing investor this year. The survey respondents include enforcement officials with state and provincial securities regulators throughout the United States, Canada and Mexico.

The survey notes internet or social media-based fraud as the top threat to investors.

Coming in the second spot are cryptocurrency and precious metals-based investments that are usually purchased through self-directed individual retirement accounts. These accounts are not protected under traditional IRAs and are popular for scammers.

Foreign exchange schemes are on the top three threat according to the survey.

The survey also notes that 82% of state and provincial securities regulators anticipate fraudsters will continue to attempt to take advantage of investor fear and anxiety related to financial market changes due to the COVID-19 pandemic to illegally sell securities this year.

“Fraudsters will always try to leverage vulnerabilities wherever they can be found. Investors may be lured by the promise of high returns as a way to supplement income lost as a result of the pandemic,” said Securities Commissioner Ty Nohara.

If an investment offer sounds “too good to be true,” it is often a sign of an investment scam. Nohara recommends that investors always ask the salesperson if the investment itself are properly registered. One way to check is to visit brokercheck.finra.org.

To report an investment fraud, contact OSC’s Securities Enforcement Branch at seb@dcca.hawaii.gov. To file a complaint of report a tip, visit dccabreg.force.com/securities/s/.

For more information and resources on investor protection, visit OSC’s Investor Education Program at cca.hawaii.gov/sec/icep.


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