NASAA Identifies Threats to Retail Investors

The North American Securities Administrators Association ("NASAA") identified the most common threats to retail investors. Among them, NASAA highlighted (i) financial scams tied to emerging technologies and (ii) marketing tactics aimed at appealing to investor emotions.

Based on a survey of the state and provincial securities regulators, digital asset fraud "currently presents the most danger to the public." Affinity frauds tied to investor emotions, in particular, "pig-butchering schemes" in which the fraudster contacts victims, develops relationships, solicits investment and then disappears. Social media and internet schemes remain high on the annual list. In addition, NASAA found that bad actors are increasingly attempting to take advantage of recent changes to the economy by "playing on fears of economic uncertainty."