By Lynn Mckeel, Fall 2018 IAC Student Intern
The SEC’s recent Investor Alert comes in the wake of history’s most devastating hurricanes. Riding the coat tails of devastation, con artists and fraudsters are capitalizing on the chaos and destruction. Recognizing the influx of cash and the kindness and virtue of others, these fraudsters manipulate situations in order to separate people from their money. Anyone can be vulnerable to their tactics.
If you have been affected by the storm and received a lump sum insurance payout, please be hyper-vigilant with your insurance proceeds.
The Investor Alert warns of a variety of schemes, some of which rely on the recovery efforts and cleanup of Hurricane damage. The con artist will tell you that insurance proceeds and a strong market demand seem like sure bet for cleanup and recovery related business. The con-artist may also rely on your distraction and lie about their business affiliations. Similarly, pump-and dumps may falsely inflate the values of their recovery and clean up company.
Keep in mind recovery and clean up are not limited to typical construction and debris clean up. In Naomi Klein’s book, The Shock Doctrine, Klein explains how corporations create new developments and enterprises when citizens are too distracted to conduct due diligence. Naomi Klein, The Shock Doctrine (1st Ed. 2007). Klein demonstrates how con artists and corrupt executives were able to side step the law in the aftermath of Hurricane Katrina’s devastation of the Gulf Coast.
If you’ve recently received an insurance payout and you’re approached to invest in a new business opportunity, don’t forget to research the company’s standing with the Secretary of State and SEC. You should also discuss investment opportunities with your friends and family before finalizing any payments.