Investment Scams: Check Before You Send Money

A stock-tip message promises to turn your $200 into $240 in a week. It carries a real professional's name and registration number.

In this fictional case, you look up the name and find a matching record. You send $200 through the website supplied in the chat. Seven days later, it shows $240. To withdraw, the site says, send another $60.

The name checked out. Who received the money?

A real name can hide a fake sender

Your search proved that the professional exists. It did not prove who sent the message.

An impersonation scheme uses another person's or firm's identity to deceive you. The US Securities and Exchange Commission (SEC) warns that scammers copy names, logos and websites. FINRA, which regulates US brokerage firms, has found forged registration reports with real identifying numbers.

The missing step was contacting the firm through details you found independently. A phone number from the same chat could lead straight back to the impersonator.

A genuine ticker identifies a security; it cannot vouch for the person asking for your money. The company can be real while the payment destination is fake.

Recognize what the pitch is doing

The SEC lists guaranteed high returns, rushed decisions and unsolicited pitches as warning signs. Secrecy and demands for more money are further reasons to stop and check. A smaller promised gain would need the same checks.

A fake investment platform is a site or app that displays invented holdings or balances. Its operator can change the number without buying anything. A screen can show a profit before a single share has been bought.

Paid investment promotion means being paid to publicize an investment. Look for who paid, how much and in what form. Payment alone does not make commentary illegal; disclosure is not an endorsement. In a pump-and-dump scheme, promoters use false claims to attract buyers, then sell into the buying they stirred up. A rising price can be part of the trap.

Verify outside the conversation

Repeat the brokerage-account registration check through Investor.gov or FINRA's BrokerCheck, opening the site yourself. Look up both the legal firm and the person, including registration, employer and disciplinary disclosures. Get the reports from the database; a copy from the sender can be altered. Registration is the start of this check, not its conclusion.

Open the firm's details to find its Client Relationship Summary, a short disclosure with contact information. Call a number from that record or summary. Ask the firm to confirm the sender, the message and the payment instructions.

Compare the full domain name in the web address with the firm's official address, without opening the supplied link. HTTPS means the connection is encrypted; it does not prove the site is genuine. Neither does a familiar logo or a polished app.

Any unresolved row is a reason to wait:

If the pitch cites company news, find the original on the company's actual investor-relations page or through SEC.gov's EDGAR filings database. Compare the company, security, date and exact claim. The SEC filings guide helps you find the document.

In this case, the firm has not confirmed the sender, and no independently verified trade or company announcement supports the pitch. You do not have to prove fraud to keep your money.

Count money sent, not screen profits

The screen claims a gain of $40:

$40 divided by $200 is 20% in seven days. The arithmetic works even if no shares were ever bought; it verifies neither a profit nor money you can withdraw.

A trade confirmation from the genuine broker gives you the security, quantity and execution price to compare with your account statement. A stranger's screenshot is still part of the pitch.

Sending another $60 would bring money sent to $200 + $60 = $260. The first $200 is no reason to risk the next $60.

This is the warning pattern of advance-fee fraud: pay money before supposedly getting money back. The concern is the unverified sender and payout, not the mere existence of a fee. The sequence can end with a report instead of another transfer.

If money or account access is at risk

Stop sending money and stop replying. Then:

1. Contact the payment provider immediately. Use your bank's, broker's or payment provider's genuine app or a number from your statement. Explain what happened and ask whether the payment can be stopped, reversed or recalled.
2. Secure exposed accounts. If you shared passwords or account access, contact the real provider's security team and follow its recovery steps.
3. Keep the evidence. Save messages, website addresses, payment records, dates and amounts. Use what you already have; there is no need to continue the exchange.

In the US, report suspected securities fraud through the SEC's reporting portal. For concerns involving a broker, use FINRA's complaint channel.

The Federal Trade Commission takes broader scam reports at ReportFraud.ftc.gov. Outside the US, also use your local regulator or law-enforcement route. Neither a recall request nor a report guarantees repayment.

An unsolicited offer to recover the loss for an upfront payment can repeat the same scheme. Help should not begin with another transfer to a stranger.

The case ends with $200 sent, $240 unverified and $60 unpaid. You have contacted your bank through its real app, saved the receipts and messages, and reported the concern to the SEC. You stopped the next payment without solving the first.

A trustworthy source can still show stale or incomplete data. The final stock-quote audit tests that next distinction.

In short

• A real registration record does not prove who sent a message.
• Check the firm, person, website and original claim outside the conversation.
• A screen balance can rise without any shares being bought.
• Stop further payments, contact the real provider, secure exposed accounts and keep the evidence.
• Report through official channels, and reject upfront demands to recover your money.