Securities Regulators Victim of Internet Scam

By Erin Harrison November 11, 2011

A group whose mission is to protect investors from fraud has found itself a victim of Internet fraud.

The North American Securities Administrators Association, an organization of state securities regulators, says it has been the victim of an attempted Internet scam, according to media reports.

NASAA reportedly directed the operator of a website which represented the State Securities Commission “to cease operations and to shut the site down on Wednesday. The site was using content from NASAA’s Web site, possibly for unlawful purposes, Washington-based NASAA said in a statement,” Reuters reported.

The fake website appeared to be offline by the end of the day Wednesday, Jack Herstein, NASAA’s president, told Reuters. It is one of several phony regulator websites to pop up on the Internet over the past few years, he said.

“We are concerned that con artists are attempting to cash in on our reputation for effective investor protection to lure others into an illicit scheme,” said Herstein, who is also the head of Nebraska’s banking and finance department, according to Reuters.

Reuter’s review of the SSC website showed similarities to NASAA’s site, but the site was clearly luring investors to provide personal information through its “claims” section.

“For example, it featured modified versions of NASAA news releases, including the announcement about the scam. But there was at least one stark difference – the fake site urged investors who had suffered unjustified market losses to file ‘claims.’ Clicking on the link led to a series of tax and other forms that asked for personal information,” the report said.

In addition to protecting investors, many of the state regulators with NASAA also help small businesses raise money and comply with securities laws. According to the NASAA, more than 100 million investors rely on regulators to keep our nation’s markets well policed and cannot afford any weakening of this successful and complementary regulatory system.


Erin Harrison is Executive Editor, Strategic Initiatives, for TMC, where she oversees the company's strategic editorial initiatives, including the launch of several new print and online initiatives. She plays an active role in the print publications and TechZone360, covering IP communications, information technology and other related topics. To read more of Erin's articles, please visit her columnist page.

Edited by Tammy Wolf

Executive Editor, Strategic Initiatives

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