(Washington, DC) The Honorable Lawrence H. Mirel, Commissioner of the Department of Insurance, Securities and Banking (DISB) is taking this occasion to alert investors to be sure they are not being provided bad advice from scam artists posing as securities regulators.
Commissioner Mirel warns that several fake "regulators" who claim to be based in the United States and often target overseas investors have been brought to the attention of the DISB by the North American Securities Administrators Association, Inc. (NASAA), of which the DISB is an active member.
"Our securities markets are known around the world for being among the safest and most fair, due in no small part to the rigorous and efficient regulatory systems existing in the United States. Scam artists are trying to cash in on our good name abroad to lure unsuspecting investors into risky penny stocks and advance fee schemes," Commissioner Mirel said.
Commissioner Mirel identified the following imitation "regulators:" the Regulatory Compliance Commission, the International Regulatory Commission, the International Compliance Commission, the International Shareholder Protection Division, and the International Exchange Regulatory Commission. Each of these entities has Internet websites and listed addresses and telephone numbers in the United States, but none have any relation to legitimate regulatory agencies or organizations such as the DISB, the U.S. Securities and Exchange Commission, the NASD, and the NASAA.
Some of these Internet websites may look very legitimate, but all successful scams do. These websites offer nothing more than fancy window-dressing to lure investors into purchasing worthless securities from unlicensed stockbrokers. These brokers and their offers are often "verified" by the phony regulators.
Commissioner Mirel said investors lose billions of dollars a year to securities fraud and warned, "there are probably many more fake regulators with Internet websites and shell offices like these. The Internet is a large universe, making it difficult to police, and sometimes dangerous for investors." To assist investors in determining if they are dealing with a fake "regulator", the DISB is issuing the following 5 warning signs.
You cannot find references to them as regulators on any legitimate United States or international regulatory website.
If they claim to be a United States regulator, there should be a reference to the entity as a regulator on the Internet websites of the US Securities and Exchange Commission
, the NASD
, or the North American Securities Administrators Association
. If the entity claims to be a non-United States regulator, there should be a reference to the entity on the website of the International Organization of Securities Commissions. If you cannot locate information about the "regulator" on the Internet website of the International Organization of Securities Commissions
, they probably are not a legitimate regulator.
They endorse or approve any investment opportunity, stock, or company. Legitimate regulators are not in the business of promoting any deal; they only enforce securities laws and promote full disclosure and fair dealing.
They say that paying a fee to "release restricted shares" is anything other than an attempt to steal your savings. This is a common ploy, and a recent twist on age-old advance fee schemes.
Little or no information about the "regulator" appears in Internet search engines. Any legitimate regulator should generate hundreds of entries in any Internet search engine.
If you ask legitimate regulators about the entity, and they say they have "never heard of them," you are most likely dealing with a fake regulator.
Contact information for the DISB, state, territorial, and provincial regulators in the United States, Canada, Puerto Rico, the U.S. Virgin Islands, and Mexico can be located on the website of the North American Securities Administrators Association
(NASAA). The NASAA is the oldest international organization devoted to investor protection and its membership consists of the securities administrators in the 50 states, the District of Columbia, Puerto Rico, the US Virgin Islands, the provinces and territories of Canada and Mexico.
Residents of the District of Columbia interested in this investor alert, investor education and investor protection matters are urged to contact Mr. Ron C. Claiborne
, DISB Public Affairs Specialist - Securities at either e-mail or (202) 442-7801.