01.12.24

FINRA Sees Spike in 'Investment Group' Frauds on Social Media

by: Melanie Waddell

The Financial Industry Regulatory Authority (FINRA) reported a “significant spike” in investor complaints of recommendations made by fraudulent “investment groups” promoted through social media channels. Complaints received by FINRA and posted on social media “describe bad actors, posing as registered investment advisors, who initially advertise ‘stock investment groups’ on Instagram and other social media channels and then turn to encrypted group chats on WhatsApp to communicate with interested investors and pitch investments.” FINRA advised investors to use its BrokerCheck “to see if the promoter is a registered investment professional, and verify that the names of the person and the firm, along with their addresses or the locations where they do business, align with your own research.”

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