Chicago-based Stoltmann Law Offices represents investors who’ve suffered losses from being scammed by their financial advisors and the firms for whom they work. For operators peddling scam investments, every crisis is an opportunity. The tragic war in Ukraine is a sad example. Scamsters are ramping up their games to take advantage of people concerned about the crisis – and those hoping to profit from it.
Since the U.S. and European Union have frozen conventional Russian assets, global attention has shifted to the marketing of cryptocurrencies. These “virtual” coins are computer code not backed by hard assets or governments. They can be “minted” by anyone at any time. They are seen are alternative forms of cash, although many of them can be fraudulent.
Ukraine had been a center of cryptocurrency scams before the war. Last year Ukrainian officials shut down “six illegal call centers. The operation carried out by the Security service of Ukraine has stopped these operations from continuing their cryptocurrency investment scams. From their base of operations, the crypto scammers were reaching out to countless potential victims to try to defraud them with promises of non-existent investment opportunities.”
The Ukraine conflict will likely trigger more “pump and dump” crypto scams. Scamsters will promote the fact that Russian investors may be using virtual currencies to move money to bypass Western sanctions. “Essentially, a pump and dump scheme,” notes yahoo finance, “involves excessive marketing and inflated promises to get investors to pile into a particularly cryptocurrency. As the price of the crypto skyrockets, investors are even more enticed to pile into it. Ultimately, once the crypto has risen dramatically, all of the original marketers sell out of it at once, driving the price down rapidly before average investors are able to jump out.” “Scammers are simply interested in creating excitement around a crypto, drawing in as many hapless investors as possible, then jumping out and collecting their big gains.”
Is your financial advisor doing their homework when they recommend cryptocurrencies? They must carefully vet all investments to ensure that what they are selling meets your financial goals and risk tolerance. They must also receive your written permission to use “leveraged” investment strategies, which employ greater risk and potential for loss. If you choose to take on more risk, they must explain in clear detail the downside of such an investment.
If you invested with a financial advisor and lost money as a result, you may have a claim to pursue through FINRA Arbitration. Please contact Stoltmann Law Offices, P.C. at 312-332-4200 for a free, no obligation consultation with a securities attorney. Stoltmann Law Offices is a contingency fee law firm which means we do not get paid until you do!