State Corporation Commission warns against Ebola scams

ebola4Following the outbreak of Ebola in western africa and its appearance in North America, the State Corporation Commission (SCC) cautions investors to beware of investment schemes related to the disease.

“Experience has shown that fraudsters often follow the headlines in an attempt to capitalize on fear and uncertainty and reap financial gain,” said Ron Thomas, director of the SCC’s Division of Securities and Retail Franchising. “We urge Virginians to be wary of any unsolicited Ebola-related investment opportunities, especially those received through the Internet. Err on the side of caution and investigate before you invest,” he said.

An analysis of Internet domain names by state and Canadian securities regulators found nearly 1,200 domains with “Ebola” in their name have been registered with top-level domains, such as .com, .net, and .org since April 2014. About 1,000 of those registrations have occurred since July, as awareness of the crisis spread. Of these sites, 184 were identified by the North American Securities Administrators Association’s (NASAA) Internet Fraud Investigations project group as suspicious. NASAA, of which the SCC’s Securities Division is a member, is an international organization devoted to investor protection.

Whether an investment is pitched via email, social media, crowdfunding websites, or telemarketers, Thomas reminds investors to use common sense. “Pie in the sky promises of quick wealth with little or no risk generally are red flags signaling potential fraud,” he said.

The SCC’s Securities Division urges Virginia investors to do the following:

  • Beware of cold callers, high-pressure sales tactics, and unrealistic claims. If an investment opportunity sounds too good to be true, it probably is.
  • Contact the SCC’s Securities Division to make sure that both the seller and the investment are properly licensed and registered in Virginia. If they are not, don’t invest.
  • Request written information about any investment and carefully review it or ask your financial adviser to evaluate it.

To find out whether an individual and his or her company are licensed to sell securities in Virginia and whether they have a history of disciplinary action, contact the SCC’s Division of Securities and Retail Franchising toll-free in Virginia at 1-800-552-7945 or in Richmond at (804) 371-9051 or e-mail the division at SRF_Registration@scc.virginia.gov. For more information, visit the Securities Division’s website at www.scc.virginia.gov/srf or the NASAA website at www.nasaa.orgExternal Link logo.