Investment Fraud and Natural Disasters

The Foreign Equities Division (FED) is cautioning investors to be vigilant against scams associated with the recent wildfires in California.

Unscrupulous individuals may exploit natural disasters, such as the recent wildfires, to ensnare victims in investment scams. These fraudulent activities can specifically target individuals receiving funds from insurance companies or other sources, and they can manifest in various ways.

• Perpetrators may prompt you to make "investments" in companies allegedly engaged in cleanup, repair, and recovery efforts.
• They might claim that your "investment" not only yields profits but also contributes to aiding the disaster victims.
• They could endorse stocks of companies purportedly set to gain substantial profits from recovery and cleanup endeavors, subsequently selling their own shares at inflated prices—a tactic known as a "pump-and-dump" scam.

These fraudsters may attempt widespread outreach through unsolicited emails, social media, or telephone calls. They may falsely assert affiliations with state and federal governments or well-known companies.

Maintain a Skeptical Stance and Seek Clarification
Exercise caution if approached with an investment opportunity linked to the Hawaii wildfires. When contemplating any investment, an effective strategy to avoid fraud is to ask questions.

• Inquire about the individual's licensing and whether the investment is registered with the Foreign Equities Division.
• Leverage Foreign Equities Division’s tool to scrutinize the background, including licensing and registration status, of anyone promoting an investment to you.

Remember that promises of high guaranteed returns with minimal risk are classic indicators of investment scams, resembling Ponzi schemes.

Safeguard Your Finances

Before making any investment decisions, especially if you've received significant payments for recovery assistance, carefully assess your overall financial situation. Keep in mind that your payment may need to cover both recovery financing and long-term support for yourself and your family.

For archived news updates and publications, please contact us.