SEC Office of Investor Education warns Investors to Beware of Spoofed websites

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On October 23, 2019, the U.S. Securities and Exchange Commission (“SEC”) Office of Investor Education and Advocacy issued an Investor Alert to warn investors about phony Certificates of Deposits (CDs) promoted through internet advertising and “spoofed” websites.

What are spoofed websites?

In this case, they are websites that mimic the actual sites of legitimate financial institutions. Investors should be extremely cautious when purchasing CDs from sites found only through internet searches.

What are some red flags on spoofed websites?

  • Offer interest rates higher than you can find at any other financial institution;
  • Promote only CDs and no other financial products, such as banking or brokerage accounts, loans, or commercial banking services;
  • Require high minimum deposits, often $200,000 or more;
  • Direct potential investors to wire funds to an account located outside the U.S., or to a U.S.-based account that has a different name than the financial institution claiming to sell the CD; 
  • Claim that the spoofed financial institution is a Federal Deposit Insurance Corporation (FDIC) member and that deposits are FDIC-insured; or
  • Identify “clearing partners” that they claim are registered with the SEC. 

For more information as well as additional resources, check out the Investor Alert by clicking here.