Stock traders beware of investment scams

CHICO >> When I turned 21, my mom took me to Reno to gamble legally for the first time.

Between tables and slots, I managed to win nearly $400 on my first night. I kept the stakes pretty low, but I was on a roll.

I decided to throw $20 at a slot machine before calling it a night and lost the whole thing. Despite the winnings, I was so bummed to lose that $20 that I never gambled again. Needless to say, I’m not a stock market guy.

But a lot of people try hard to be smart investors and some who are new to it are hoping to dive in slowly. It’s those people that scammers target using social media.

The United States Securities and Exchange Commission issued a warning back in August of investment fraud by means of social media. Basically, the fraudulent folks are pretending to be celebrities, brokers and investment advisers with the goal of baiting people to hand out money.

“When you receive investment information through social media, verify the identity of the underlying source,” reads a statement from the SEC. “Look for slight variations or typos in the sender’s account name, profile, email address, screen name, or handle, or other signs that the sender may be an imposter.”

You could say the SEC might have a bone to pick here because the statement goes on to say that the fraudsters have impersonated SEC staff.

It’s also noted that these scammers, because they use multiple fake accounts connected to various throwaway email accounts, are very hard to track down.

“It can be difficult to track down who is behind a social media account, and anonymity can make it harder for fraudsters to be held accountable,” the statement reads.

Be smart with how you go about investing and trading stocks and avoid taking advice from social media accounts, even if they seem legitimate at first glance.

Scam of the Week generally runs every Tuesday. Readers are welcome to contact reporter Jake Hutchison to report scams and potential scams they have come in contact with by calling 828-1329 or via email at jhutchison@chicoer.com.