Security News > 2022 > January > 70 investors lose $50 million to fraudsters posing as broker-dealers
A California man confirmed his role in a large-scale and long-running Internet-based fraud scheme that allowed him and other fraudsters to siphon roughly $50 million from dozens of investors over eight years, between 2012 to October 2020.
In conversations with victims who reached out for investment opportunities, the fraudsters impersonated FINRA broker-dealers claiming to be employed by the financial institutions they spoofed on the scam sites.
"At least 70 victims of the fraud scheme nationwide, including in New Jersey, collectively transmitted approximately $50 million that they believed to be investments."
In July 2021, the FBI's Criminal Investigative Division and the Securities and Exchange Commission warned investors of fraudsters impersonating registered investment professionals such as brokers and investment advisers.
"Fraudsters may falsely claim to be registered with the Securities and Exchange Commission, the Financial Industry Regulatory Authority or a state securities regulator in order to lure investors into scams, or even impersonate real investment professionals who actually are registered with these organizations," the FBI and SEC said.
Investors are advised first to check if those promoting investment opportunities are licensed or registered with the Investor.