The Securities and Exchange Commission (SEC) has updated its list of soliciting entities.
This comprehensive list is a stark reminder of the various types of misleading entities, including 24 solicit entities, six impersonators of genuine firms, and four bogus regulators.
The SEC makes it a mission to tackle unregulated and elicit impostors that can harm those looking to invest.
SEC updates soliciting entities list
Investors and those burnt by these impostors take their concerns to the SEC, hoping to flag their illicit practices. This is usually reported and added to the Public Alert: Unregistered Soliciting Entities (PAUSE) list.
The list gives those prospective investors the time to pause before backing an entity with their hard-earned cash.
The SEC statement said that these entities were “providing inaccurate information about their affiliation, location, or registration. Under U.S. securities laws, firms that solicit investors generally are required to register with the SEC and meet minimum financial standards and disclosure, reporting, and recordkeeping requirements.”
Some of these firms can mimic the office of government regulators, so the list provides a concrete factsheet of which ones have been flagged. For example these firms will mimic correspondence and interact with prospective investors through messaging, email, and social media prompts.
The government watchdog says that people should “Be aware that communications — including phone calls, voicemails, text messages, messages via social media, emails, letters, and certificates — may falsely appear to be from official U.S. government sources, including the SEC.”
The dedicated investor site from the SEC’s Investor Education and Advocacy Department gives potential investors comprehensive information on what to look out for. Avoiding scammers is a key priority for the regulator and they have 5 key things to look out for when fraudsters are about:
- Fraudsters Connect With You on Social Media Platforms or Through a Supposedly Accidental Text Message, and Then Gain Your Trust
- Fraudsters Exploit the Hype Around Emerging Technologies Such as Artificial Intelligence (AI)
- Fraudsters Impersonate or Exploit Trusted Sources
- Fraudsters May Pump Up the Price of a Crypto Asset and Then Sell at Your Expense
- Fraudsters Demand Additional Costs That They Falsely Claim Will Allow You to Withdraw From Your Account, or to Recover Losses
The SEC has also asked those who question correspondence from the public body to refrain from giving sensitive information. This is a precaution if an impostor acts or behaves like a government regulator.
Image: Ideogram.
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