Identity Related Securities and Investment Fraud
Identity-related investment fraud refers to offers that use false or fraudulent claims designed to solicit investments or loans, or to provide for the purchase, trade, or use of false securities. It covers a broad range of illegal actions that involve the deception of investors or manipulation of financial markets.
Investors and brokers are advised to watch for fraud schemes in which perpetrators pose as authentic brokerage firms on the Internet. This scam is associated with business identity theft. Perpetrators create a website using the name of a legitimate registered broker. A fake entity is then established using the broker’s name and address. This Internet entity, impersonating a respected brokerage, tells victims to check professional membership databases to ensure that the bogus broker is “real.” The Securities and Exchange Commission has received numerous complaints from investors about this type of business identity theft.
Fraud, in general, refers to the use of deceit and trickery to obtain money, rights, or property, and it can target individuals or businesses. Some of the most egregious white-collar crimes involve defrauding shareholders, committing insider trading, or making costly and fraudulent insurance claims.
Securities companies have determined that identity thieves would rather utilize stolen account identifiers and take over legitimate investment accounts that already exist than establish new unauthorized accounts using stolen information.