The Indiana Secretary of State’s Office, an IN-CASE founding member, has joined an international enforcement task force organized by the North American Securities Administrators Association (NASAA) to investigate fraudsters looking to capitalize during the novel coronavirus COVID-19 pandemic.
“We are proud to join our colleagues in NASAA’s COVID-19 Enforcement Task Force,” said Secretary of State Connie Lawson. “Investment schemes related to COVID-19 are a significant threat to Hoosier investors, and fraudsters need to know that my office is dedicated to effectively protecting investors from COVID-19 investment fraud.”
Through the Indiana Securities Division, the Secretary’s office is a member of NASAA, the membership organization of state and provincial securities regulators in the United States, Canada and Mexico. The task force consists of state and provincial securities regulators and was formed to identify and stop potential threats to investors stemming from the COVID-19 pandemic. Task force members are using online investigative techniques to identify websites and social media posts that may be offering or promoting fraudulent offerings, investment frauds, and unregistered regulated activities.
Modeled after NASAA’s successful Operation Cryptosweep, the new initiative is being led by NASAA’s Enforcement Section and its Enforcement Technology Project Group. The Task Force is using online investigative techniques to identify websites and social media posts that may be offering or promoting fraudulent offerings, investment frauds, and unregistered regulated activities.
“Just as state and provincial securities led the way in protecting investors from fraudulent cryptocurrency-based schemes in 2018, we stand ready to protect investors from COVID-19-related schemes during this unprecedented time,” said Christopher W. Gerold, NASAA President and Chief of the New Jersey Bureau of Securities.
As part of its work, the task force will be examining a recent spike in Internet domain names linked to the pandemic. The task force has identified as many as 200,000 Coronavirus-related domains as of April 20, 2020. Most of these domain names appear to have been created within the past three months. Through the task force, state and provincial securities regulators will be analyzing these domains to identify those offering securities and/or investment advice, and will pursue those that appear to pose a viable threat to investors.
To assist in protecting investors from COVID-19 investment scams, the Indiana Securities Division encourages public reporting of suspected fraudulent COVID-19 investment offers. Investors who see or suspect they fell victim to COVID-19 related investment scams can contact the Division at securities.sos.in.gov.
“Reporting suspicious COVID-19 related investment offers is important to help the Indiana Securities Division investigate and prosecute illegal activities and protect our citizens from falling victim to a financial fraud in these unprecedented times,” Securities Commissioner Alex Glass said.
A critical component of fighting fraud is investor awareness. To help investors identify common telltale signs of possible investment fraud, the Securities Division suggests three questions to ask before making a new investment.
Is the investment being offered with a guaranteed high return with little or no risk? All investments carry risk that you may potentially lose some or all of your money. Anyone who says their investment offer has no risk is lying. No one can guarantee an investment return.
Is there a sense of urgency or limited availability of detailed information surrounding the investment? If someone offers you a “can’t miss” investment opportunity and pressures you to invest right now, don’t be afraid to walk away.
Is the person offering the investment, and the investment itself, properly licensed or registered? For the same reasons you wouldn’t go to an unlicensed doctor or dentist, you should avoid unregistered investment salespeople and their products.
“Make sure you have all the facts before you hand your money over to someone else to invest,” Glass said.