AUSTIN, Texas (KETK) – The Texas State Securities board is warning investors about a growing number of online investment schemes.
These schemes often involve people impersonating registered, licensed firms. The TSSB said these schemes are getting more and more sophisticated as scammers more efficiently use technology to defraud the public.
On Wednesday, for example, Securities Commissioner Travis J. Iles sent an emergency cease and desist order against Oscar Hill, accusing him of operating an impersonation scheme.
According to the order, Hill registered an internet website for Prestige Assets Mgnt, LLC – an unlicensed dealer with a similar name to Prestige Asset Management, LLC, a registered investment adviser. Iles said using a similar website name is a common attempt to trick the public into dealing with an imposter.
“These imposters not only threaten our Texas investors but also create reputational harm for our registered community,” Iles said. “Investors need to be ever-vigilant when considering potential investments through electronic devices.”
The order said the website looked legitimate, including the Central Registration Depository Number or CRD Number – for the real Prestige Asset Management, LLC, and a map to its office.
“The internet provides a wealth of tools to scammers,” said Enforcement Director Joe Rotunda. “The scammers are taking advantage of these tools. They’re using every trick in the book to appear legitimate – even masquerading as regulated firms and registered dealers.”
These schemes can vary. In some instances, scammers impersonate a popular financial professional or advisor.
The Texas State Securities Board is recommending investors consider the following information when dealing with purportedly registered parties online:
- Anyone can be anyone on the internet, and investors should remember scammers are using fake social media accounts to obscure their identities. Texans should take steps to identify phony accounts by looking closely at content, analyzing dates of inception and considering the quality of engagement. The Better Business Bureau has released additional tips for spotting these fake accounts.
- Scammers are attempting to trick investors by registering domain names for fraudulent websites that are very similar to domain names for real websites. Investors should always pay careful attention to domain names for internet websites.
- Texans should independently research the registration of investment firms. They should not use hyperlinks provided by the parties and instead directly contact the Texas State Securities Board.
- Registered parties are required to truthfully disclose all material facts, and they must disclose the risks associated with each product. On the other hand, bad actors will often minimize or conceal risks, and instead use hyperbole to tout profits and payouts. Investors should pay attention to these details, as they can provide clues about the potential illegitimacy of a scam.
- Bad actors may be impersonating licensed parties by using phony websites that place viruses or malicious software on victim’s computers. Investors should continue to embrace cybersecurity.
If you believe you have been the victim of an impersonation scheme or any other fraudulent securities scheme, you can contact the Texas State Securities Board. We are available by telephone at 512-305-8392 or email at firstname.lastname@example.org.