Amid the ongoing COVID-19 pandemic, the Utah Department of Commerce is alerting investors to be on guard against an anticipated surge of fraudulent investment schemes.
“Extraordinary measures are being taken to protect the health of the public. The public response to a difficult situation is encouraging,” said Chris Parker, Interim Executive Director of the Department of Commerce. “Utahns should pay special attention to protecting their investments against scam artists. In fact, our Division of Securities anticipates some specific scams that investors should be aware of to safeguard their financial wellbeing.”
In particular, the Division of Securities warned investors to be on the lookout for investments specifically tied to the threat of COVID-19.
“Preying on fear based upon current events, scammers will attempt to take advantage of investors,” noted Thomas Brady, Director of the Division of Securities. “If part of the pitch to invest involves COVID-19, be wary.”
A few examples:
- A company is “raising capital” for manufacturing of surgical masks and gowns, or producing ventilators and other medical equipment, or distributing small-molecule drugs and other preventative pharmaceuticals, or even manufacturing vaccines and miracle cures.
- “Safe” and “guaranteed” returns for investing in gold, silver, or other commodities due to volatility in the stock market.
- Get rich quick schemes targeting retired or near-retired investors, promising immediate returns to cover losses in their retirement portfolio.
“No matter where the “hot tip” comes from, the standard rule in investing applies: If it sounds too good to be true, it probably is,” said Brady. “We are putting the word out now, because it can often be years before people know they have been fleeced. We encourage Utahns to vet investment questions with properly licensed professionals, who have a fiduciary responsibility to their clients.”