Beware of COVID-19 investment schemes

Independent Newsmedia
Posted 4/3/20

The Arizona Corporation Commission offers tips on how to safeguard yourself from fraudulent investment schemes amidst the coronavirus pandemic.

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Beware of COVID-19 investment schemes

Posted

The Arizona Corporation Commission offers tips on how to safeguard yourself from fraudulent investment schemes amidst the coronavirus pandemic.

The Corporation Commission alerts investors about an anticipated surge of fraudulent investment schemes resulting from the lingering pandemic, according to a press release, detailing concerns of scammers targeting investors, capitalizing on recent developments in the economy and preying on concerns about the volatile securities market.

Investors must remain vigilant to protect themselves from schemes that falsely claim to raise capital for companies manufacturing surgical masks and gowns, producing ventilators and other medical equipment, distributing preventative pharmaceuticals, or manufacturing vaccines and miracle cures.

The schemes often appear legitimate, the release said, because they take advantage of current news, medical reports and social and political developments.

“In these extraordinary times, the health and welfare of all must be our foremost concern, and that includes our financial health. The primary focus of the Securities Division remains on the protection of Arizona investors,” said ACC Chairman Bob Burns in a prepared statement.

Scammers may seek to take advantage of concerns with the volatility in the securities markets to promote “safe” investments with “guaranteed returns” including investments tied to gold, silver and other commodities; oil and gas; and real estate.

Also, investors could expect to see “get rich quick” schemes touting fast, guaranteed returns to pay for rent, utilities or other expenses, the release noted.

Some schemes, the release said, target retirees and senior citizens, falsely claiming they can quickly and safely recoup any losses to their retirement portfolios.

The Commission’s Securities Division suggests investors avoid any investment that “sounds too good to be true such as guarantees of high returns with no risk.”

To stifle investment fraud, the Corporation Commission’s Securities Division suggests asking questions, researching the investment, the company and person offering it, the release said.

Investors should always ask if the salesperson, the company and the investment itself are registered by a regulator as information can be confirmed by the Investigator on Duty at the Corporation Commission’s Securities Division.

Plus, check the SEC’s Investment Adviser Public Disclosure database and FINRA’s BrokerCheck.

Tips  to avoid becoming prey to scammers:

  • Avoid doing business with anyone who is not authorized to sell securities.
  • Beware of miracle cures such as scientists and medical professionals
  • Avoid fraudulent charity schemes including white-collar criminals posing as charities soliciting money for those affected by COVID-19; avoid online solicitations for cash and gift cards. Work with a legitimate, established organization to donate to a cause.
  • Beware of schemes tied to government assistance or economic relief that requires prepayment of fees, taxes on the income, the advance payment of a processing fee or any other type of charge. Don’t give or verify any personal information as government officials already have your information.

Also, investors should verify the promoter’s licenses and registration with the Commission’s Investigator on Duty by calling 602-542-0662, toll free in Arizona at 1-866-VERIFY-9 (837-4399); or, email SecuritiesDiv@azcc.gov.

The Corporation Commission’s investor education website has information on wise investing and fraud prevention at azcc.gov/azinvestor.

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