FINRA recently issued an Alert to warn the public about a recent auction rate securities (ARS) “phishing” scam that promises compensation from ARS settlements in exchange for personal information. The email looks like it originated from FINRA—although it did not. It purports to inform the recipient of regulatory actions, including fines imposed by FINRA related to ARS, and states that the recipient is due $1.5 million regardless of the amount of their ARS investment or loss. The email then “phishes” for personal information including occupation, address and phone number.

Settlement Procedures Related to Auction Rate Securities

FINRA—along with the Securities and Exchange Commission and state securities regulators— recently has announced final settlements with numerous brokerage firms relating to the sale of Auction Rate Securities. Contrary to the “phishing” email, FINRA does not contact investors directly to advise them of the settlements or settlement procedures.

Instead, firms that enter into settlements with FINRA typically send eligible investors offers to repurchase auction rate securities that the firm sold to them. This buyback offer generally takes the form of a physical letter, not an email.

“Phishing”—Fraudulent Emails That Steal Your Personal Information

This “phishing” fraud is the latest in a long line of online scams that typically claim to be from a brokerage firm, bank, credit card company, government agency or other service you use or organization you trust. To appear genuine, these emails may use:
• The names of real people.
• Legitimate looking email addresses, such as “support@[name of your financial institution].com”.
• Authentic looking logos and graphics.
• Links to pages of a bona fide Web site or information pulled directly from an organization’s Web site.
• Official looking fine print and references to laws.

Most of these emails attempt to lure you into providing sensitive personal information by requesting that you provide it in a reply email or by clicking on a link to a Web site that mimics a legitimate Web site and asks you to provide the information. Various “urgent” messages are also used to coax you to provide information. In the email above, recipients were admonished: “Please do not delay as there are so many people to share from this settlement.”

How to Protect Yourself

What should you do if you receive
a “phishing” email? Do not respond.  And do not click through to any links that might be provided in the email.

If you have you questions about auction rate securities or believe you have been the victim of a “phishing” scam, or if you believe that you have been the victim of a securities fraud, The White Law Group may be able to help. To speak to a securities attorney, please call our Chicago office at 312-238-9650 for a free consultation.

The White Law Group is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.

For more information on The White Law Group, visit http://whitesecuritieslaw.com.