Do Not Be Fooled

Investor scams are on the rise. We have been alerted to new scams targeting investors and are passing along this warning to our clients.

Pump-and-Dump Schemes

According to Charles Schwab, fraudsters are targeting investors over social media to lure investors into "pump-and-dump" schemes. Neither fraudulent actors on social media, nor fraudulent pump-and-dump schemes are new; however, it must have caused quite a frenzy at Schwab since it resulted in an email to their customers. 

Fraudsters will make false statements to convince investors to buy stock, which "pumps" up the stock price. When the price surges, fraudsters "dump" their shares by selling them at the inflated price. Because the fraudsters dump so many shares, the stock price crashes, and the innocent investors are left holding devalued, and often valueless, stock.

With the use of AI and all the technology tools available, fraudsters create fake social media profiles of celebrities, banking professionals, and financial experts to gain credibility. Fraudsters use all the platforms available to them, from social messaging apps, like WhatsApp and X, to investment group chat rooms, to text messages and phone calls.

To protect yourself, do not:

• Invest in get-quick-rich offers
• Invest over social media
• Send money to someone you do not know personally
• Act on impulse based on someone else's guidance

If it's too good to be true, it probably is.

Gold Grifters

Victims of gold bar scams reported losses of $126 million in 2024. One such scam involves computer pop-ups instructing that your personal information was compromised with a prompt to call a number on your screen. When you make that call, someone is impersonating a federal agent, and they suggest you safeguard your money by converting your savings into gold bars. You will likely receive an official looking letter that appears to come from the FBI. You will also receive instructions on where to drop the gold so it can be kept in a secure location. Once you hand over the money, you will not see the gold again.

In another scam, the fraudster claims to be with the Social Security Administration. This person claims that you are being investigated for fraud and that the court has to hold your funds to cover the fraud until you clear your name. You will be instructed to buy gold coins and turn them over to for safekeeping. Again, once you hand over the money, it is gone. 

In a third scam, purported government employees threaten to arrest family members unless they get paid.

As the price of gold increases, these intricate scams are targeting individuals across the country. Myriad articles share how people were defrauded out of their hard-earned money. Do not be fooled. Research the facts to confirm whether others have been impacted by the same situation you are in.

If anyone contacts you directly, stay calm, do your research, and seek help by contacting your local law enforcement in a manner you initiate.

The information provided here is for general purposes and should not be considered as legal, financial, or investment advice.