Finance, Investments SEC/FINRA broker impersonator, ongoing fraud scheme.

[LittleEpsilon]

Jurisdiction

New York

There is an ongoing criminal operation that I strongly believe requires public attention.

I am one of the victims, that lost his life savings, endangered family's safety and is in fear for his life due to inappropriate protection of information and regulation by SEC/FINRA and lack of action taken by the banks involved.

In March 2020 I was looking for a broker/investment advisor. After researching how to do so, I familiarized myself with SEC, FINRA and their guide how to avoid scam.
With an aid of brokercheck, adviserinfo and doing a general background check I finally decided to approach Ms. <Y> working for <some major bank>. Back then nothing arouse any suspicion. She had her own website, was active on social media and had her own LinkedIn account that matched the information posted on SEC and <some major bank>. Her IP, phone number and websites were in vicinity of <some major bank's> headquarters. She seemed professional, wrote and spoke impeccably, there was no pressure at all to invest and before transferring the funds, she presented Investment Strategy, contract form and asked me to register on various trading platforms like tradestation, eToro, CoinBase, Cex.io, which was an awfully long and detailed process.

Everything seemed as it should, I got my weekly updates on the stock market, regular contact was maintained and monthly 'profits' were withdrew, until one day I was awaiting for a scheduled phone call to overview the market but it never arrived. It seemed odd. After prolonged search of any evidence of misconduct I have found a trace on twitter that the personalized website Ms. <Y> was using is involved in a scam. Having this information I immediately called <some major bank>, where Ms. <Y> is working to share my finding. The answer I got shocked me, as they were well aware of this fact long before and the person I spoke to surely wasn't Ms. <Y>.

From there I contacted FINRA, where my case was first reviewed, then sent to SEC and CFTC due to lack of jurisdiction. In the meantime I informed law enforcement agencies and got in touch with the press. During the communication period with the reporter I have found out, that there are other SEC regulated brokers with stolen identity, each having their own personalized website, social media accounts and LinkedIn profiles. There were also traces of other criminal activity like fake banking and law firms, illegal pharmaceutical drugs, fake passports and documents and much more.
In the meantime, from the traces left by the scammer I have found that there are at least 20 SEC/FINRA regulated brokers that are impersonated. There are also fake charity organizations, law and banking firms and trading platforms. Not to mention the shady websites containing forged documents, drugs and firearms. I have reported all this to law enforcement agencies, financial regulators or even the banks themselves, where the real brokers are located.

Unfortunately to this day many of the websites are still active, with confirmed victim pool steadily rising.
I have managed to take down some websites, but they reappear under different address.
FINRA transferred my case to SEC and CFTC.
SEC informed me to supply the whistleblower form but after further inquiries I got response that they cannot confirm if the investigation is ongoing or even if it exists.

There is a person on twitter whom I contacted, highlighting this issue as can be seen here:
<redacted>

As for the fake websites, to give a sample:

<redacted>

One of the victims mentions part of this issue here:

<redacted>

The other victim whom I did contact got her pictures stolen, which she mentions here:

<redacted>

Naturally I am in possession of the documentation including correspondence with the impersonator, funds transfer, contract forms, fraudulent websites and appeal forms.

All of the brokers present on the websites are active, visible in SEC/FINRA database (like brokercheck and adviserinfo), work for the banks disclosed on the webpage and are regulated.

The problem is that I have been very cautious and did a great amount of research before concluding that I do speak to the real certified, regulated by SEC/FINRA broker and got caught straight into the scammers hands. They operate using legal banks and exchange platforms, faking government credentials and performing identity thefts, so one cannot even suspect wrongdoing.

I am really concerned about mine and my family's safety, considering the fact that this criminal organization breached (using SEC and FINRA credentials) our personal information data including phone numbers, e-mails, living address, names and identification documents.

Taking into account the continuing ruthless and unrestricted by law enforcement agencies act of this criminal group, I believe it is only a matter of time, when one of the accomplice will be knocking on our family's home doors.

I have not responded to any communication attempt, after figuring out who is calling. I am however uncertain if this course of action won't further upset the perpetrators.

How one should proceed forward in order to keep my family safe?

# I was unable to post with the direct links present (marked as redacted). I will gladly supply them when needed.

 

[Zigner]

Your matter is too complex for an internet forum. I've reported your post due to the identifiable information presented.

 

[LittleEpsilon]

Your matter is too complex for an internet forum. I've reported your post due to the identifiable information presented.

I have redacted any remaining potentially identifiable information.

I still believe this is a matter for public attention and would really appreciate any advice how to proceed with this situation (I have tried everything I could to manage the damage and protect others from sharing the same fate but it seems insufficient)

 

[Zigner]

I have redacted any remaining potentially identifiable information.

I still believe this is a matter for public attention and would really appreciate any advice how to proceed with this situation (I have tried everything I could to manage the damage and protect others from sharing the same fate but it seems insufficient)

Your matter is too complex for an internet forum to help with.

 

[flyingron]

I am a FINRA Arbitrator, but I disclaim that I don't speak for FINRA or anybody else.

FINRA, the SEC, and the FTC all have different responsibilities and authorities. You can keep saying SEC/FINRA broker, but there isn't really any such thing. Brokers are regulated by FINRA. SEC regulates the securities (and those making them) themselves. Neither is law enforcement nor do they have an involvement in criminal proceedings.

Your story has some holes in it. FINRA can't "transfer" anything. Upon a valid request from the respondent, they can terminate a FINRA action you start, possibly suggesting a better forum. If all else fails, once you've made a good faith effort to avail yourself of the proper regulatory channels, there's always the option to bring the case in court.

I can tell you that there are attorneys that specialize in these matters. Indeed, I don't think I've ever had a case where any of the parties was not represented by counsel

 

[Tax Counsel]

Neither is law enforcement nor do they have an involvement in criminal proceedings.

Just a point of clarification. They do not have criminal investigators but they do contact and work with federal criminal investigators of other federal agencies (primarily FBI) if they believe that a federal crime was committed in the areas they oversee. Also, the SEC does have a civil investigation unit and pursues civil remedies for SEC violations.

 

[Tax Counsel]

How one should proceed forward in order to keep my family safe?

I don't know who these people are, the details of the scam, or what law enforcement is doing about it, if anything. As a result, I cannot give you specific recommendations of anything to do. Most scammers take whatever money they can get and run; they try to stay as anonymous as possible and have as little real contact with their victims as possible. Thus, they don't usually resort to trying physical violence. But again, I don't what the particular scammer you encountered does. I suggest you contact an attorney in your area and provide all the relevant information you have for advice on how to proceed.

 

[LittleEpsilon]

Your story has some holes in it. FINRA can't "transfer" anything. Upon a valid request from the respondent, they can terminate a FINRA action you start, possibly suggesting a better forum. If all else fails, once you've made a good faith effort to avail yourself of the proper regulatory channels, there's always the option to bring the case in court.

I checked the mail correspondence and the sender ends with @finra.org (I also did 100% initiate correspondence through official finra website, which I triple checked).
There is a part of a message which mentions that my case was forwarded:

"Due to FINRA's lack jurisdiction over this matter, we have forwarded your complaint to the United States Securities and Exchange Commission ("SEC") and the Commodity Futures Trading Commission ("CFTC") which may be able to assist you further.



You may contact the SEC and the CFTC directly at the following addresses:"

So am I speaking with this impersonator all along (who has somehow gained access to official finra mail servers?)

I suggest you contact an attorney in your area and provide all the relevant information you have for advice on how to proceed.

This is naturally the first thing I did. I was in contact with the major securities attorney that would represent me. He suddenly dropped my case stating that he cannot represent me, although he believes this matter is of public interest. No further comment was given.
The same thing happened with all the other lawyers I did contact. I did send the case documents, overviewed them and never got response again after sending the documented evidence.
I also abruptly lost contact with the reporter of major financial press too and never got any reply.

Most scammers take whatever money they can get and run; they try to stay as anonymous as possible and have as little real contact with their victims as possible.

That is what terrifies me the most. I suddenly got multiple communication attempts from these people after abrupt cease in correspondence and spotting the crime. I am not sure what their intentions are.

 

[cbg]

I am going to say this one more time. This is not an appropriate forum for a matter of this complexity. If you persist in trying to advance your issue here, I will be locking the thread.

 

[Michael Wechsler]

I work in the fintech arena. I'll take a look at what you posted and I'm sorry that you may have been a victim of fraud. But on the surface, my intuition tells me that @flyingron may be telling you what you might not want to hear and that the fraud may have taken place outside of FINRA's jurisdiction. Keep in mind that many of these agencies regulate conduct of its professional members, not how a fraudster might impersonate them to an unknown party's deteriment. (On a related side note, if you search here for Brad Pitt, you'll see an example of a woman who sued him believing that he was responsible to control unrelated fraudsters who scammer her by impersonating him.)

As to redactions, if you're asking for review of publicly accessible websites , there is nothing wrong with posting them. Personally identifiable information that creates problems here are usually those which involve non-public PII, such as social security number, passport number, etc. My guess is that you are probably not the only one to potentially have been victim to such a scam.

 

[Michael Wechsler]

Reviewing the documents took much less time than needed. I'm sorry to hear that one of these reeled you in and it can happen to anyone. But these impersonators don't operate within the jurisdiction of the FTC, CFTC, FINRA or any of those governing bodies. This is more suitable for the FBI, state attorney general and law enforcement because it's impersonation and pure fraud.

My license information is public - name, listed address, attorney ID, etc. Unfortunately anyone can obtain this information and try to impersonate me, sell themselves as an attorney and defraud another person. Who should be responsible for policing this behavior? The New York and New Jersey Bar's job is to ensure that the public can verify that I'm licensed. But law enforcement would be the appropriate place to reach if someone tried to steal my identity and pass themselves off as me to sell personal services to you.

I have no idea what information you received from the services you used. Perhaps the checks came back correctly because they should in most instances, e.g. address listed and phone number. But did you check the domain name of the website and the registrant? Did you visit any of those people in person at the addresses listed by FINRA or whatever organization it is that provided you with the professional's information? I'm guessing you didn't conduct business personally. In the future, if you're transferring money I suggest you always conduct business in person at some point to ensure you are seeing the person you expect - something of a reverse "know your customer" check or a "know your advisor".

I wish I could say that this type of scam is extraordinary but it isn't. It certainly pains me that this is an overlooked area in the cybersecurity arena, as is much of social engineering. Unless you have an idea as to who the perpetrators are, this would be an extremely expensive lawsuit since it would likely require subpoenas to release information you do not have.

I return to my earlier impression that the industry regulators are not the place for your remedy but law enforcement. Best of luck to you and am sorry for your losses.

 

[LittleEpsilon]

Mr. Micheal Wechsler,

Thank you for your attention to this matter.

From what I understand, having over twenty profiles with fully personalized websites, LinkedIn accounts, YouTube channels* using governmental and banking credentials and stealing the identity of legitimate, regulated brokers and impersonating them to commit a fraud is of no concern of the regulatory authority that protects and educate the investors.

*Morgan Stanley Brokers Will Use Twitter & LinkedIn To Market Themselves

It seems it is my fault, as I was naive enough to put any trust on the information posted by this governmental authority.

Through IAPD, you can:

• Search for an investment adviser firm
• View the adviser's current Form ADV filing, including the firm's current relationship summary
• Check the adviser's registration status
• Search for an investment adviser representative
• View information on the representative's professional background and conduct
• Check the representative's registration status
• Link to a state regulator's website
• Automatically transfer to the FINRA BrokerCheck website for information about brokers and their registered representatives.

Using the information like above the scammers are gaining credibility (by using the exact credentials as visible on BrokerCheck and IAPD) and lure potential investors.

Let's be honest, who in the right mind would send any money to unknown, unverified entity?
However how more likely one would send the money if one got confirmation from the bank, regulatory authorities and could check visible database that indeed there is such a person and he/she is an active broker/investment advisor?

Considering especially the fact that some banks allow their employers to advertise on social media platforms
(in case above link is insufficient evidence, here is another article Best in Financial Services: Goldman Sachs - The Shorty Awards that states: )

In 2018, Goldman Sachs launched 13K social posts, bringing in 2.6B impressions, 900M video views and 5.7M non-video engagements. Over the course of 2018, we increased our total social media followers by 24% to a total of 2.6M, all while never running promoted account ads.




Thank you for everyone's time and attention to this matter. I believe I have no further comments.

I am attaching the redacted links for anyone who would like to review the information:

Home ‣ AlbertCharlesMichael July 2, 2021

Lucy Maria Koss - Personal Portfolio

TradeFerry

https://www.reddit.com/r/legaladvic...ible_identity_fraud_or_scam_by_an_investment/

https://www.reddit.com/r/RBI/comments/f2ic0f/financial_adviserbroker_scam_i_just_stumbled/

Scam Warning... please share it!

 

[Michael Wechsler]

I'm truly very sorry and sympathetic to your plight. It's an awful feeling to be scammed and be left without the money. Thank you for kindly sharing all those resources which could possibly help others, hopefully searching online and finding it first and being forewarned.

Unfortunately it is often those who are trustworthy who are more easily persuaded to put trust in others because of their good nature. There is certainly no shame in that, only a need to be even more aware of this Achilles heel and need to be more vigilant overall. And the perpetrators are parasites who provide no added value and, unfortunately, limited law enforcement resources and penalties are reasons why those feel the risk of "doing business" is worthwhile. Best of luck to you.