The Washington State Department of Financial Institutions (DFI), Securities Division has received multiple complaints from Washington residents regarding a potential pump and dump scheme impersonating registered investment advisor (RIA) firms and their employees.
The investors were communicating on WhatsApp in different trading groups where they received recommendations to purchase stock from whom they believed were legitimate investment advisor representatives of three different RIAs. The three firms and their employees that are being impersonated are: Circle Advisors, Inc., WealthMark Advisory Group, LLC, and Sequoia Financial Group. All three investors were recommended to purchase the stock, China Liberal Education Holdings Ltd (CLEU). At least two of the investors purchased CLEU when the shares were valued at $5.39 and $7.36 per share. However, within days, the investors found that the stock price dropped and their shares were worth $.50 to $.3039 per share. One investor invested their entire life savings of $250,000 and was told that they should sell and salvage what was possible, which at that point was next to nothing.
Sequoia Financial Group’s website includes an important message on the homepage which reads:
“Important Message: Fraudulent WhatsApp Messages
We became aware that a WhatsAppTM “investment forum” is impersonating financial services organizations in an attempt to obtain client credentials or lure prospects into making a fraudulent investment. Sequoia Financial Group does not use WhatsApp to communicate with clients. If you receive such a message, please report it to https://www.ic3.gov/.”
WealthMark Advisory Group, LLC’s website includes an important message on the homepage which reads:
“*Beware of Cyberfraud: WealthMark Advisory Group, LLC will never use WhatsApp, I do not communicate with clients or prospects via WhatsApp, and will never make investment recommendations via any social media app. (If you are concerned about any suspicious communication that you have received from my firm, please contact me at 714-835-2000 or use the “contact me” link on https://www.wealthmark.com)
**Beware of other firms using similar names to WealthMark Advisory Group, LLC. They are not related to my firm in any way!”
DFI cautions consumers to beware of persons previously unknown to them offering investment advice, even if they purport to be legitimately licensed investment professionals. Scammers can impersonate investment professionals and offer advice that benefits scammers and is harmful to consumers.
To check the licensing status of an investment professional, please visit FINRA Brokercheck. After confirming that the investment professional is appropriately licensed, attempt to independently verify that you are indeed speaking with the real person. Try contacting the licensed individual using online resources such as Brokercheck or the firm website, rather than through the communication channels they provided to you directly. If you have any doubt about the authenticity of the person soliciting you, contact the Washington State Department of Financial Institutions, Securities Division at (360) 902-8760. If you live outside of Washington State, contact your state securities regulator.
If a consumer believes a person or company has violated state law or acted improperly regarding an investment product or service, they may file a complaint with the Securities Division.
Additional Resources
Beware of Fraudsters Impersonating Investment Professionals and Firms – Investor Alert
Information regarding Pump & Dump schemes and how to protect yourself