Protecting Yourself From Regulator Imposter Scams

While FINRA will never ask you for money, there are scammers who might try to convince you otherwise. These financial fraudsters pose as regulators, requesting fees to transfer funds or offering bogus investment “guarantees” that are designed to steal your money.

Communications from these fraudsters are becoming more sophisticated and can be compelling. Be aware: Neither FINRA, nor any of its employees, will ever provide a guarantee on an investment, offer to facilitate your participation in any sort of money-making scheme, or request access to your personal assets.

Recognizing Regulator Imposter Scams

Fraudsters who impersonate FINRA or a current or former employee can look surprisingly real, sometimes even posing as the CEO or other senior executives. Correspondence might seem authentic, often including the regulator’s name and logo and attachments of official-looking documents or supporting materials, which might even contain “signatures” from nonexistent regulators. Some even feature images of fake but realistic-looking FINRA employee badges.

In some cases, fraudsters go even further, using AI-cloned voices and deepfake videos to impersonate FINRA executives in real-time phone or video calls. These fraudsters then rely on the false sense of legitimacy they’ve created in order to request funds or suggest that FINRA provides guarantees related to an investment pitch that is, in reality, an advance-fee scam.

A common advance-fee scam seeks to entice you to send money to cover administrative or regulatory charges associated with an alleged transfer of funds or a buyback of stock shares that are currently virtually worthless or "underperforming." But the scammer performs no service and, once you send money, you never see it again—or any of the money promised.

Some fraudsters impersonate representatives of government agencies—such as the Internal Revenue Service (IRS) or Social Security Administration (SSA)—or law enforcement officials and threaten severe penalties if you don’t pay “owed” balances. Others inform you of unexpected inheritances from unknown relatives, which, the fraudsters claim, will be transferred to you once you pay the taxes and fees. These inheritance funds don’t, in fact, exist. Other regulator imposter scams involve sending fraudulent emails from domain names such as “@finra.eu” and “@finrarec.com,” which are not connected to FINRA. Through these emails, fraudsters seek to obtain personal information—such as account information, transaction history and crypto wallets— in order to gain access to your assets.

Fraudsters might also pose as a regulator or reference FINRA or another entity in efforts to retarget investors as part of recovery scams. Recovery scams typically begin with communication from someone offering to help you recoup money lost in an imposter or other type of investment scam but can often lead to even greater losses.

A Key Tactic: An Onslaught of Personalized Communication

Through repeated communications by phone, email, text messages or social media channels, fraudsters might attempt to build a personal relationship with you. These communications can be elaborate, including detailed requests and other phony information, such as fake seals, logos and documents.

Fraudsters can be relentless in their communications, often continuing to follow up until you send money or provide information that will give them access to your assets. If you do send money, the scammer might then ask for additional funds or simply disappear.

Avoid Being Scammed

The best way to avoid losing money in advance-fee or other types of imposter scams is to ignore unsolicited messages from anyone you don’t know. Always be on the lookout for red flags of fraud—such as unsolicited offers, requests for secrecy, and promises of abnormally high or consistent returns—and remember that FINRA, its officers and employees will never offer investment guarantees or request access to your assets.

If you’re suspicious about an offer that appears to come from FINRA or another regulator, or you think the claims you’re receiving might be exaggerated or misleading, contact FINRA or the other referenced regulator directly—using contact information you look up independently—before you send any money.

If you have information about potentially fraudulent, illegal or unethical activity, contact your local law enforcement, and submit a regulatory tip to FINRA. If you think you’ve been the victim of any cyber-enabled scam, file a report with the FBI’s Internet Crime Complaint Center.

Learn more about how to protect your money.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.