(STL.News) – The SEC’s Office of Investor Education and Advocacy (OIEA) is issuing this Investor Alert to warn investors about phony Certificates of Deposit (CDs) promoted through internet advertising and “spoofed” websites – websites that mimic the actual sites of legitimate financial institutions. Investors should be extremely cautious when purchasing CDs from sites found only through internet searches.
“Spoofed” websites – often using URL addresses similar to those of legitimate firms’ websites, or using legitimate-sounding names and URLs – may be used to trick investors into buying bogus CDs. Spoofed websites selling fake CDs often have red flags of fraud. They may:
- Offer interest rates higher than you can find at any other financial institution, with no penalties for early withdrawals;
- Promote only CDs and no other financial products, such as banking or brokerage accounts, loans, or commercial banking services;
- Require high minimum deposits, often $200,000 or more;
- Direct potential investors to wire funds to an account located outside the U.S., or to a U.S.-based account that has a different name than the financial institution claiming to sell the CD;
- Claim that the spoofed financial institution is a Federal Deposit Insurance Corporation (FDIC) member and that deposits are FDIC-insured; and
- Identify “clearing partners” that they claim are registered with the SEC.