Fraud Case Studies: SEC Innovating in Investor Education

By Christopher Pugh, Fall 2015 Intern

The folks at the Securities and Exchange Commission (SEC) have been busy innovating by developing new ways to educate investors on how to spot the red flags of investment fraud. The SEC’s website now has links to Fraud Case Studies that show the scam artists in action. Each case study is a fact pattern that illustrates how a different type of securities fraud scam works.

Currently, there are three case studies that use fictional characters to demonstrate some of the tactics used to scam investors using affinity fraud, Ponzi schemes, and pump and dump schemes. Too Good to Miss, Golden Opportunity, and Inside Scoop each set up the players and then reveals what the potential investor was told by the scam artist before investing in the scam. Finally, each case study ends with a recap of the lessons learned from each hypothetical victim’s ordeal. The Fraud Case Studies are an innovative way to educate the investing public about spotting investment fraud through hypotheticals, which can make difficult concepts more understandable.

For more information on preventing investment fraud, visit the SEC’s website and the SEC’s website at