News Release

Corporation Commission Announces Top Investor Threats for 2021

For Immediate Release | 3-3-2021

Media Contact | Nick Debus

Direct |  602-542-0728

E-Mail | NDebus@azcc.gov

PHOENIX - In recognition of Consumer Protection Week, the Corporation Commission today reminded Arizonans to be on the lookout for investment schemes pitched online through social media platforms—particularly those in precious metals, cryptocurrencies, promissory notes and foreign currency exchange markets. 

Schemes related to these investment products were identified as the top threats facing investors this year in a survey by the North American Securities Administrators Association (NASAA), of which the Corporation Commission is a member. The survey includes responses of enforcement officials with state and provincial securities regulators throughout the United States, Canada and Mexico.

The survey found fraudulent internet- or social media-based frauds as the top threat to investors. Ranked second are cryptocurrency-related and precious metals-based investments, especially those purchased through self-directed individual retirement accounts since they lack the services and protection of traditional IRAs, which can be fertile soil for scammers. Foreign currency exchange (FOREX)-related schemes rounded out the top three investor threats.

In particular, the Commission’s Securities Division expects to see a resurgence of high-yield foreign exchange and cryptocurrency-related schemes targeting investors this year cleverly disguised as a membership interest or an investment program.

The NASAA survey indicated that 82 percent of state securities regulators anticipate fraudsters will continue to attempt to leverage investor fear and anxiety related to changes in financial markets and the economy due to COVID-19 to illegally sell securities this year.

“Unscrupulous individuals always try to leverage vulnerabilities wherever they can be found. We expect to see an uptick in complaints from investors lured into programs offering the promise of high returns to supplement income lost due to the pandemic,” said Chairwoman Lea Márquez Peterson.

Investment offers that sound “too good to be true” often share similar characteristics. The most common telltale sign of an investment scam is an offer of guaranteed high returns with little to no risk. All investments carry the risk that some, or all, of the invested funds could be lost.

“Anyone who says their investment offer has no risk is not being honest,” Chairwoman Lea Márquez Peterson said. “Get-rich schemes are built on empty promises and empty pockets.”

Before making any investment decision, the Corporation Commission urges investors to do their homework by asking questions and verifying the answers with an objective resource not associated with the investment. Most importantly, investors should always ask and check with a securities regulator if the salesperson and the investment are registered to be offered or sold in Arizona.

License/registration status and potential disciplinary history of the investment promoter can be confirmed by the duty officer in the Commission’s Securities Division by telephone at 602-542-0662 or by email, SecuritiesDiv@azcc.gov. Other helpful tips and guidelines on wise investing and fraud prevention can be found at  www.azcc.gov/azinvestor.

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Arizona Corporation Commission

1200 W. Washington Street

Phoenix, AZ 85007

 

Corporations Division

1300 W. Washington Street

Phoenix, AZ 85007

 

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Tucson, AZ 85701