The SEC recently released an “investor alert” with the goal of helping “investors be better aware of fraudulent investment schemes that may involve social media.” The SEC acknowledges in the alert that social media has become an important tool for the investing public to accumulate information about all facets of investing. Investors are increasingly looking to social media like Twitter, YouTube, LinkedIn and Facebook for information on brokers and brokerage firms and also to do research on individual investments and investment vehicles. The SEC wants it to be known that “While social media can provide many benefits for investors, it also presents opportunities for fraudsters. Social media, and the Internet generally, offer a number of attributes criminals may find attractive.”

According to the SEC, social media provides those inclined to commit fraud the opportunity to “contact many different people at a relatively low cost.” Additionally, the ease at which individuals can create profiles and pages that may appear legitimate may be to their advantage. The alert says, “…that feeling of legitimacy gives criminals a better chance to convince you to send them your money.” Finally, social media provides an opportunity to those wishing to commit fraud with some anonymity which may “make it harder for fraudsters to be held accountable.”

The SEC goes on to give tips for how investors may use the positive aspects of social media for investing, while protecting the investors from fraudulent investments schemes. Like many investor alert’s, the SEC says being an “educated investor” in the best way to protect one’s self. They offer five tips to “avoid fraud online.”

1. “Be Wary of Unsolicited Offers to Invest”

2. “Look out for Common “Red Flags””

3. “Be Thoughtful About Privacy and Security Settings”

4. “Ask Questions and Check Out Everything”

5. Avoid “Common Investment Scams Using Social Media and the Internet”

– “Pump-and-Dumps” and Market Manipulations

– “Fraud Using “Research Opinions,” Online Investment Newsletters, and Spam Blasts”

– “High Yield Investment Programs”

– “Internet-Based Offerings”

You can find the full text of the SEC investor alert about social media at this address: http://investor.gov/news-alerts/investor-alerts/investor-alert-social-media-investing-avoiding-fraud

If you are concerned that you have been the victim of securities fraud and would like to speak to a securities attorney about your potential to recover your losses through securities arbitration please call our Chicago office at 312-238-9650.

The White Law Group, LLC is a national securities fraud, securities arbitration, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.

For more information on The White Law Group, visit https://whitesecuritieslaw.com.