The Sickest Stock Market Scam Going

My pal Bill Singer turned up what I believe to be the absolute sickest stock market scam going right now (other than Web 2.0 IPOs).  This is the quintessential con, one that adds insult to injury in an extraordinary way.  It looks like the regulators are onto it (as it’s a variation of an old routine), but take a look (via Bill’s must-read blog at Broke and Broker):

It doesn’t matter. It just doesn’t matter. You could have a brokerage account with Merrill Lynch, Morgan Stanley, or JP Morgan and only invest in their recommended securities. You could have a self-directed brokerage account at Schwab or TD Ameritrade and only buy what you personally pick.  Regardless of where you invest or what you buy, chances are at some time you’re going to get stuck with a dog, a piece of garbage.

If you’re lucky, you’ll take your losses and lick your wounds.  If you’re unlucky, some lowlife scam artist will contact you with the promise of making you whole — and, boy, are you going to hear some whoppers about how your losses will be transformed into cash…

The catch? Ah, yes — the catch!  In some cases, you’re going to have to send them funds — up front – to pay fees, charges, taxes. . . whatever, trust me, they’ll come up with something.  Now, being the skeptic that you are, you may ask for proof of the bona fides of this offer.  The glib scamster who has you on the phone will likely compliment you on your caution — after all, he or she will soothingly tell you, you were burned once before.  Tell you what, check us out on a website maintained by a leading securities regulatory organization.  Of course, just because some crook sends you to what appears to be an honest-to-goodness regulator’s website, doesn’t mean that the website is honest, filled with goodness, or has anything to do with a real regulator.

Last month the North American Securities Adminstrators Association (“NASAA”) sent a Cease-And-Desist letter to the operator of the “State Securities Commission” website: http://statesec.org.

Posing as regulators with a legit-looking site loaded with NASAA content and a “claim form”, the cons are convincing investors in losing stock investments to give up personal information or even upfront funds so that they can be made whole on losing trades.

The only reason this works is because everybody likes to believe they were screwed when they lose on an investment.  It is preferable to admitting that they were wrong or early or whatever.  These dirtbags prey on that.  Be careful out there.

Source:

Fake Securities Regulators Scam Investors (Broke and Broker)