The Nigerian email scams offering business deals worth millions in exchange for some advance payment is so yesterday.
The more progressive of this breed of scam artists have shifted gears. With old trade and new tools, they have now entered the realm of social media.
In fact, 2012 has already clocked its first social media scam. It was carried out in the U.S., but given the reach of social media, the world is the fraudster’s oyster.
In this particular case a purported investment adviser named Anthony Fields, of Lyons, Illinois, tried to sell $500 billion in fictitious medium-term notes using LinkedIn discussions to promote bank guarantees on the notes.
The Securities and Exchange Commission found that he provided false and misleading information about the firm’s assets under management, clients, and operational history to the public through its website and in SEC filings.
“Fraudsters are quick to adapt to new technologies to exploit them for unlawful purposes,” said Robert B. Kaplan, co-chief of the SEC enforcement division’s asset management unit. “Social media is no exception.”
Financial advisors are increasingly engaged in social media as a means of communicating with clients. Many investors seeking investment advice online are vulnerable to fraud.
By targeting these fraudsters, the SEC has made its intentions clear to “pursue fraudulent activity on new and evolving platforms.” One hopes Canadian regulators are watching closely.