In the wake of the devastation wrought by Hurricane Harvey, the Texas State Securities Board is cautioning investors to watch out for opportunistic investment scams.
"We know from experience that disasters can bring out scammers who seek to profit from the misfortune of others,” Texas Securities Commissioner Travis J. Iles said. “Unsolicited investment offers seeking to capitalize on the aftermath of Hurricane Harvey should be approached with extreme caution.”
Iles urged investors to watch for red flags of hurricane-related scams, including unsolicited email, social media messages, and telephone calls promoting an unsavory variety of potential investments. Investment promoters may try to sell investment pools or bonds to help storm victims, water-removal or purification technologies, electricity-generating devices and distressed real estate remediation programs.
The State Securities Board warns that the potential for fraud will exist for a long time, particularly given the extent of the damage and the months and years of recovery ahead.
Scam artists may try to target storm victims who anticipate receiving large lump-sum insurance settlements. One common sales pitch is an investment that promises high returns with "little or not risk" – a combination that is impossible and should be avoided at all costs.
One way to avoid fraud is to check if an individual or firm offering an investment opportunity is registered in the state of Texas. If they are not, they may be opearating illegally. You can check the registrations and backgrounds of investment advisers and brokers on our site or call 1-888-663-0009.
Also, delete unsolicited emails or social media messages and hang up on aggressive cold callers promoting hurricane-related investments, especially those from small companies touting unproven or new technologies or products.
For more information on avoiding financial fraud, and learning the basics of investing, order free copies of the Texas Investor Guide. Email Robert Elder at the State Securities Board at email@example.com and provide a mailing address and the number of copies you would like to receive.
Separately, the North American Securities Administrators Association, the association of state securities regulators, is extending the examination enrollment windows for the NASAA Series 63, 65, and 66 examinations for candidates in counties and regions declared disaster areas by state or federal governments as a result of Hurricane and Tropical Storm Harvey.
Individuals who have an examination window due to expire between August 25, 2017 and September 22, 2017 will have their enrollment windows extended to November 6, 2017. NASAA may provide additional extensions as more information becomes available. NASAA exam information is available here.