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Investor Newsletter

November 21, 2024

Investor Education

Webinar: Protecting Yourself: NFA and CFTC Investor Resources

World Investor Week (WIW) is a week-long, global campaign promoted by the International Organization of Securities Commissions (IOSCO) to raise awareness about the importance of investor education and protection. The eighth annual WIW took place from Monday, October 7 through Sunday, October 13.

As part of WIW, NFA and the Commodity Futures Trading Commission (CFTC) held a webinar entitled Protecting Yourself: NFA and CFTC Investor Resources on October 9. This webinar covered the key messages of WIW, including:

Conducting due diligence when considering investments;
The importance of working with regulated entities;
Checking whether an investment professional is licensed; and
Recognizing the warning signs of investment fraud.

Investor Bulletin: World Investor Week 2024

Emerging technologies like artificial intelligence, crypto assets and digital platforms, such as social media and mobile trading apps, are increasingly influencing how people invest. It's important for investors to understand how bad actors might exploit these technologies to conduct investment scams. It also remains important for investors to do their own research and conduct due diligence before investing.

For World Investor Week, the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), the CFTC, NFA, the Securities Investor Protection Corporation (SIPC) and the North American Securities Administrators Association (NASAA) published a bulletin offering investors tips to increase their resilience when using emerging technologies.

Information courtesy of the SEC

Investor Protection

CFTC Investor Alert: Relationship and Messaging App Investment Scams

Fraudsters often hide their true identities, reach out to unsuspecting targets (often through online messaging apps), gain their trust over time with promises of guaranteed returns and then defraud them through fake investments.

Recent investor alerts from the CFTC identify the different kinds of relationship and messaging app investment scams and offer advice on how to avoid these types of fraud.

Information courtesy of the CFTC

Six Tips to Avoiding Shell Company Fraud (FINRA Investor Insights)

Shell companies—companies that have no or nominal business operations or non-cash assets for an extended period of time—can be used for legitimate purposes. However, they can also be used by fraudsters as vehicles for stock manipulation. In a recent Investor Insights post, FINRA describes pump-and-dump schemes and offers advice on how to identify and avoid these attempts.

Information courtesy of FINRA

Informed Investor Advisory: “Registered, Professional” Crypto Trader Scams

Fraudsters know many investors are interested in digital assets but are unsure where to turn for help. These bad actors are taking advantage of this situation by posing as registered professional crypto traders.

NASAA's recent Informed Investor Advisory explains how these scams work, red flags to watch out for and tips for staying protected.

Investors can also use NFA's BASIC tool to research the background of derivatives industry professionals. BASIC is completely free, and NFA recommends all investors use the tool to conduct due diligence before investing.