The Securities Investor Protection Corp. urges consumers to be aware of a “phishing” scam where individuals are pretending to be SIPC agents in order to collect money from investors.
During the scheme, the phony agents are claiming to be SIPC agents and are asking individuals for personal information or payments in order to return funds that were lost in an investment scam.
In the past when victims lost money in an investment scam, they were contacted either by email or phone. The fake agents made a request for the investors to pay an upfront fee to help them recover funds that were lost from the scam.
After declining to pay this upfront fee, the agents continued to contact the individuals where they claim to have seized the assets of the company that defrauded them. In order for the phony SIPC agents to return the money to an investor, the individual has to fill out a form with personal information and send it back to the agent.
SIPC officials said they were notified about this scam from investors who have lost money in the past from a similar fraudulent activity or were contacted by a conspirator of this scheme and decided not to participate in this action.
“When the liquidation of a brokerage firm is handled by SIPC, investors with missing stocks or cash do not pay for recovery of those assets,” said Stephen Harbeck, president of the SIPC. “Any individuals contacted by supposed representatives of SIPC who request an upfront fee or personal information should be extremely wary.”
The SIPC maintains a special reserve fund mandated by Congress to protect the customers of insolvent brokerage firms for any firm that fails, owing customers cash and securities that are missing from their accounts. SIPC either acts as trustee or works with an independent court-appointed trustee in a brokerage insolvency case to recover funds.
The SIPC said it has contacted federal authorities to conduct an investigation regarding this scheme.
