BP oil spill investment scams make an appearance

The Securities and Exchange Commission is alerting individuals and small businesses about potential investment frauds targeting those who receive lump sum payouts from BP due to the oil spill in the Gulf.

According to the SEC's investor alert, that scam artists may target payout recipients with oil spill-related investment opportunities that promise high returns with little or no risk, or involve secretive or complex strategies. Members of religious or ethnic communities, professional organizations, or other close-knit affinity groups could be likely targets for these scams because of the high level of trust that often exists within these groups and their tendency to share information with one another.

The SEC's investor alert suggests steps that individuals can take to avoid fraud, such as asking extensive questions and double-checking answers with an unbiased source. It also contains tips and resources for deciding how to use a lump sum payout. The SEC also has begun working with public libraries near BP claims centers to distribute a special package of financial education materials to Gulf residents.

"We have seen firsthand how recipients of highly publicized payouts can become targets for investment fraud," said SEC Chairman Mary L. Schapiro. "In addition to our education efforts, we are on the lookout for any securities scams in the Gulf area attempting to defraud individuals, families, and businesses who already are financially strapped."

After Hurricane Katrina, many scams targeted individuals receiving compensation from insurance companies. These scams took a number of forms, including trading programs falsely guaranteeing high returns, promoters touting companies purportedly involved in clean-up efforts, as well as classic Ponzi schemes.

"We are working with public libraries to provide BP payout recipients and other Gulf residents with the information they need to invest wisely and avoid fraud," said Lori J. Schock, Director of the SEC's Office of Investor Education and Advocacy.

The SEC's Invest Wisely materials for Gulf residents include educational brochures and other helpful information. Order a free sample folder by e-mailing a request to LibraryOutreach@sec.gov.

Related articles:

You may like these other stories...

The prospect of International Financial Reporting Standards (IFRS) being fully adopted in the United States in the near future are growing less likely, as the Financial Accounting Standards Board (FASB) and the International...
House proposes $10.5B, eight-month highway billThe House Ways and Means Committee proposed a transportation funding bill on Tuesday that calls for a temporary extension of current transportation funding levels until May 31,...
Event Date: July 17, 2014, 2 pm ETThis webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.Participants will learn:...

Upcoming CPE Webinars

Jul 16
Hand off work to others with finesse and success. Kristen Rampe, CPA will share how to ensure delegated work is properly handled from start to finish in this content-rich one hour webinar.
Jul 17
This webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.
Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.