October 28, 2021

Volume XI, Number 301

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October 28, 2021

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October 27, 2021

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October 26, 2021

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SEC Issues an Investor Alert about Digital Asset and “Crypto” Investment Scams!

The Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy (OIEA) and Division of Enforcement’s Retail Strategy Task Force (RSTF) issued an investor alert to “remind investors to watch out for investment schemes involving digital assets and “Crypto.” Fraudsters continue to exploit the rising popularity of digital assets to lure retail investors into scams, often leading to devastating losses.”  The September 1, 2021 Investor Alert was entitled “Digital Asset and “Crypto” Investment Scams – Investor Alert” coincided with the news release about a lawsuit and my blog that the SEC files suit for a $2 BILLION fraud by global crypto lending platform!.  The Investor Alert included these red flags of fraud:

  1. “Guaranteed” high investment returns.  Promises of high investment returns with little or no risk are a classic warning sign of fraud.  Fraudsters may post fabricated historical returns on their websites showing high investment returns.

  2. Unlicensed/unregistered sellers.  Unlicensed, unregistered sellers commit much of the securities fraud targeting retail investors in the U.S.  Check out the background (including license and registration status) of anyone offering you an investment in securities using the search tool on Investor.gov.

  3. Skyrocketing account values.  Depictions of investment accounts rapidly increasing in value and providing large returns are often fake.  This is a tactic fraudsters use to entice investors with the prospect of great wealth.

  4. Sounds too good to be true.  If an investment “opportunity” sounds too good to be true, it probably is.  Remember that the potential for high investment returns usually involves high risk.

  5. Fake Testimonials.  Also, never rely solely on testimonials in making an investment decision.  Fraudsters sometimes pay people – for example, actors to pose as ordinary people turned millionaires, social media influencers, and celebrities – to tout an investment on social media or in a video.

Please stay safe and invest cautiously!

© 2021 Foley & Lardner LLPNational Law Review, Volume XI, Number 253
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About this Author

Peter Vogel, trial attorney, Foley Lardner
Partner

Peter Vogel is renowned as both a trial and transactional lawyer who deeply understands technology, science and intellectual property, and the opportunities and problems they pose for clients. Governments and administrative agencies, as well as major corporations and emerging businesses, rely on Peter to get right to the heart of an information technology or e-discovery dispute; he knows what to expect and how it will play out in the courtroom. This eliminates unproductive rabbit trails and reduces the cost of litigation for all parties. When negotiating agreements for...

214-999-4422
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