Recognizing and Responding to Messaging Application Investment Fraud

Messaging applications make it easy to communicate quickly, but they also give fraudsters an efficient way to conceal their identities in order to reach potential victims. Using WhatsApp, Discord and similar platforms, an individual can create an account using someone else’s name, photograph, professional biography or company logo. The resulting profile may appear credible even though it has no connection to the person or organization being represented.

How impersonation fraud works

Fraudsters often collect information from corporate websites, professional biographies, social media profiles, regulatory filings and other public sources. They may then combine a recognizable name with a photograph, title, company logo or description of professional experience to create the appearance of legitimacy.

After establishing contact, the sender may offer investment recommendations, invite the recipient to join a private group or encourage participation in an exclusive opportunity. Some schemes eventually involve requests for personal information, account credentials, money transfers or cryptocurrency purchases.

The presence of accurate professional information does not confirm that the person sending the message is genuine. Even a detailed profile can be assembled from publicly available material.

Warning signs of potential fraud

Recipients should exercise caution when an unsolicited message:

• Claims to come from an investment professional with whom the recipient has no established relationship.
• Promotes specific securities, trading strategies or investment opportunities.
• Promises unusually high, consistent or guaranteed returns.
• Creates pressure to act quickly or keep the opportunity confidential.
• Requests personal records, identification documents, passwords or financial account information.
• Directs money to an unfamiliar bank account, payment service, digital wallet or cryptocurrency exchange.
• Asks the recipient to download an application, open an unfamiliar link or join a private messaging group.
• Discourages independent verification of the sender’s identity or credentials.

What to do after receiving a suspicious message

Do not respond to the sender, click links, download files or provide personal or financial information. Avoid sending money, purchasing securities or transferring cryptocurrency based on instructions received through an unsolicited message.

If you receive communication from someone claiming to be an employee of Ferguson Wellman, West Bearing or Octavia Group that appears suspicious, please contact your portfolio manager or by contacting the firm via information on our Contact page. Ferguson Wellman will never contact you regarding investment opportunities by way of social media or messaging applications.

Preserve relevant evidence before blocking the account. Screenshots, phone numbers, usernames, website addresses, payment instructions and transaction records may be useful when reporting the incident.
Suspicious accounts can often be reported and blocked directly through the application. Suspected internet fraud may also be reported to the FBI’s Internet Crime Complaint Center at complaint.ic3.gov or the Federal Trade Commission at reportfraud.ftc.gov.

Anyone who has already transferred funds or disclosed account information should notify the applicable bank, custodian, payment provider, cryptocurrency exchange and their portfolio manager immediately and report the matter to the appropriate law enforcement authorities.

Verification should be conducted independently using trusted public sources rather than links or information supplied by an unsolicited sender. Search for the firm on Investor.gov, locate the firm’s Form CRS and initiate contact using the telephone number or website listed there. Investment advisory firms and their registered professionals can be researched through the U.S. Securities and Exchange Commission’s Investment Adviser Public Disclosure database.

How Ferguson Wellman addresses fraud concerns

Ferguson Wellman takes reports of fraud, impersonation and unauthorized use of its name seriously. We will never use a messaging application to:

• Solicit an investment from someone with whom the firm has no established relationship.
• Request an account password, authentication code or security credential.
• Direct someone to send money or cryptocurrency to an individual, digital wallet or unverified account.
• Ask someone to install remote-access software or provide control of a computer or mobile device.
• Guarantee an investment return or claim that an opportunity carries no risk.
• Pressure someone to act immediately or keep an investment opportunity confidential.

While a polished profile and familiar name can create a convincing appearance, you should always take the time to examine the communication, verify credentials independently and recognize common warning signs to help prevent an impersonation attempt from becoming a financial loss.

This material is for informational purposes only. The views expressed represent the opinion of Ferguson Wellman and are not a guarantee of any particular result.