The SEC wants to alert the individuals receiving compensation from insurance companies after natural disasters like hurricanes, floods, oil spills, and fires that they may be targets of investment fraud. This compensation gives rise to investment scams and takes many forms. There are the classic Ponzi schemes where new investors pay for the first investors offering quick, high returns that are unusually consistent. There are also the pump-and-dump scams where fraudsters pump up the price of stocks and when investors try to sell their overvalued shares, the prices fall and they lose money.
Individuals who receive compensation from insurance companies are often targeted by fraudsters, so the SEC is reminding people to be wary of exciting offers than may come by way of email spam, the internet, or by companies. Fraudsters have many faces. Investment fraud is a sadly common phenomenon, and it’s hard for the average citizen to keep track of the many varieties of scams in circulation.
The SEC recommends that individuals be skeptical and ask questions but also take the time before making an investment to ask advice from attorneys specializing in such legal issues. Evans Law firm is a plaintiff’s firm specializing in consumer cases such as banking, insurance, and investment fraud, personal injury, elder abuse, (Physical and financial), as well as qui tam and whistleblower cases. If you think that you may have been the victim of fraud or abuse, please contact Evans Law Firm at (415) 441-8669 for a free consultation.