OCT 09, 2020
(COLUMBIA, S.C.) - Oct. 9, 2020 - The Securities Division of the South Carolina Office of the Attorney General, along with the North American Securities Administrators Association (NASAA) and FINRA, have joined together to encourage investors to proceed cautiously with new investment opportunities. Investors should be aware that fraudsters may try to take advantage of the buzz surrounding companies promoting products and services related to the coronavirus pandemic.
With the world focused on the COVID-19 pandemic, fraudsters continue to peddle supposed miracle cures or purportedly innovative technologies and are preying upon unsuspecting investors. Investors should be wary of schemes they see on the internet and social media that claim to be raising money for companies promising new health care products that can detect, treat, or cure the coronavirus. While some of these claims could be legitimate, many will ring hollow, leaving investors with nothing but broken promises and empty pockets.
These pitches may include offers to invest in medical technology or healthcare companies by purchasing membership units in general or limited partnerships, stock or “penny stock,” or through other investment vehicles, including private placement offerings, initial coin offerings or other cryptocurrency-related investments, or crowdfunding. To learn more about these products, see “Additional Resources” at the end of this advisory.
State and provincial securities regulators recently launched an enforcement initiative to disrupt investment schemes related to the pandemic. Many of the schemes share common characteristics.
Even when investment offerings are made in accordance with the law, many are highly speculative and subject to the forces of market demand and competition. Be wary of optimistic offers, especially when made during a crisis.
How to Protect Yourself from COVID-19 Scams
Check the SEC's website to find out whether the company files any reports or other disclosures with the SEC. Read the reports and disclosures and verify any information you have heard about the company.
What You Can Do
Before making any investment decision, make sure you understand what you are investing in and who you are doing business with. You can verify the status of investment professionals and find out whether they have a history of customer harm by contacting the Securities Division at 803-734-9916 or go to www.scag.gov/registering-a-complaint, or use the tools available from the SEC and FINRA.
Additional Resources
General
Private Offerings
NASAA Informed Investor Advisory: Private Placement Offerings
FINRA Private Placements, Explained
Crowdfunding
NASAA Informed Investor Advisory: Crowdfunding
FINRA’s Crowdfunding and the JOBS Act: What Investors Should Know
Initial Coin Offerings & Cryptocurrencies
NASAA informed Investor Advisory: Initial Coin Offerings
FINRA: Initial Coin Offerings and Cryptocurrencies.
For media inquiries please contact Robert Kittle, [email protected] or 803-734-3670
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