Investment schemes touted on social media are the top threat to investors in 2021, according to the North American Securities Administrators Association (NASAA).
A survey of enforcement staff of the state and provincial regulators pointed to online investment pitches as the biggest risk to investors this year, followed by schemes involving cryptoassets, precious metals and foreign exchange.
“In particular, enforcement officials expect to see a resurgence of high-yield foreign exchange and cryptocurrency-related schemes targeting investors this year disguised as membership or investment programs,” the group said in a release.
The survey also found that 82% of regulators expect that fraudsters will continue to exploit the economic disruption and investor fear created by the Covid-19 pandemic to sell their schemes.
“Bad actors always try to leverage vulnerabilities wherever they can be found,” said Lisa Hopkins, president of NASAA and West Virginia’s senior deputy securities commissioner, in a release. “We expect to see an uptick in complaints from investors lured into programs offering the promise of high returns as a way to supplement income lost as a result of the pandemic.”
NASAA noted that investment scams often promise high returns with little to no risk.
“Investing is a long-term proposition,” Hopkins said. “Get-rich schemes are built on empty promises and empty pockets.”