On May 3, 2019 FINRA (The Financial Industry Regulatory Authority) published a Notice and Warning to member firms concerning fraudulent imposter broker websites, designed to fool investors into transmitting funds to thieves.
Anthony M. Abraham, Esq., PC has been involved in several cases in which impostor Websites were used to steal entire IRA accounts. In one case, an investor from Perth, Australia, called that he wired the entire balance of his retirement account to a broker in Hong Kong, who promised half price shares in the then new Alibaba IPO. The website was a fake; so were investment advisor internet listings for a purported “Investment Advisor” in New York State (the reason we were called in NYS). All funds were lost; the case could not ne pursued in the USA when the money was wired into Hong Kong, never to be seen again. The investor was wiped out.
FINRA therefore issued a Warning Notice to Member Firms.
FINRA suggests that member firms take proactive steps to monitor for imposter websites, including registering URL name variations and using monitoring services to watch for imposter websites. FINRA also suggests that member firms take responsive action in event that an imposter website is discovered, including (among other things) calling local law enforcement, the nearest FBI field office and the relevant state’s Attorney General.
FINRA’s notice stated in pertinent part:
“…, several member firms have informed FINRA that they have experienced challenges related to imposter websites developed by various malicious parties. An imposter website typically is designed to mimic a member firm’s actual website to obtain existing or potential clients’ personally identifiable information (PII) or login credentials, which the website sponsors subsequently use to engage in financial fraud. Malicious parties have been targeting member firms regardless of whether those firms have an existing online presence. In some cases, they have also created email domains and accounts to correspond to the imposter websites. While this is not a new attack strategy, FINRA has observed that the frequency of such attacks on broker-dealers may be increasing.
Member firms can take proactive steps to monitor for imposter websites. For example, firms may consider registering website URL name variations, such as common misspellings or visually similar character substitutions, and using social media or website monitoring services to watch for imposter websites.”
To be forewarned is to be forearmed. Do your due diligence on the identity of anyone an investor might wire money to.
Anthony M. Abraham, Esq., PC is experienced in broker fraud, churning and unauthorized trading claims. If you suspect that your account has been mismanaged, please call us Toll Free at 1-877-430-4877 for a Free Consultation or email us at Anthony@Abrahamattorneys.com.