Pennsylvania Secretary Wiessmann Warns Investors of Zika Virus-Related Scams
HARRISBURG, Pa., Aug.11, 2016 /PRNewswire-USNewswire/ -- The Department of Banking and Securities warns consumers to investigate companies that offer investment opportunities based on claims of products or services related to the Zika virus.
"Scam artists often exploit the headlines for their own purposes to defraud investors," said Secretary of Banking and Securities Robin L. Wiessmann. "With the world's attention focused on the Olympics in Brazil and the methods being used to combat the Zika problem, investors in the United States need to be wary of claims by stock promoters of effective 'cures' or 'treatments' for Zika developed by their company."
Last week, New York's attorney general issued cease and desist orders against seven companies whose products "are known to be ineffective" in preventing or protecting people from Zika. Additionally, the U.S. Securities and Exchange Commission (SEC) announced that it is aware of "increased stock promotion of companies that claim to be developing products or services relating to the Zika virus."
Wiessmann urged investors to watch out for these red flags of potential investment fraud, courtesy of the SEC:
- Unregistered investment professionals. Many fraudulent investment schemes involve unlicensed individuals or unregistered firms. The SEC's Investment Adviser Public Disclosure (IAPD) database, which is available on Investor.gov, allows investors to check the registration status of anyone recommending or selling an investment.
- Promises or guarantees of high investment returns with little or no risk. Every investment carries some degree of risk, and the potential for greater returns often comes with greater risk. Investors should be skeptical of any investment that guarantees a high rate of return on your investment or does not disclose risk.
- Unsolicited offers, including through social media. A news post on your Facebook wall, a tweet mentioning you, a direct message, an email, a text, a phone call, or any other unsolicited communication – meaning you didn't ask for it and don't know the sender –regarding an investment "opportunity" may be part of a scam. Investors should be especially suspicious if told that the promotion is based on "inside" information or asked to keep the investment opportunity confidential.
The department has published "Zika-Related Investment Scams," which provides guidance to investors who may be solicited to invest in companies claiming to be developing or marketing Zika-related products or services. This guidance is available online at: http://bit.ly/2aYOwHb (PDF).
The general public can also learn more about the Zika virus from the Pennsylvania Department of Health: http://bit.ly/2aB0QBi.
Members of the public can contact the Department of Banking and Securities consumer helpline (1-800-PA-BANKS) to file a complaint or ask questions about financial products, transactions, or companies. Consumers and businesses can learn more at www.dobs.pa.gov, and are also invited to connect to the department's outreach efforts by following us on Facebook and Twitter or subscribing to the department's newsletter.
Media contact: Ed Novak, 717-783-4721
SOURCE Pennsylvania Department of Banking
Share this article