Attorney General James Warns New Yorkers of Investment Scams on Meta Platforms

The alert details how fraudsters exploit the names of trusted financial leaders and celebrities to steal savings. These schemes include pump-and-dump operations, confidence scams, and fraudulent cryptocurrency schemes that take advantage of victims to extract as much money as possible.

In pump-and-dump schemes, victims are lured into investment groups and convinced to buy cryptocurrencies or low-priced stocks. Scammers hype the assets to increase prices, then sell when the price is high, leaving victims to lose their money.

Ads often feature recognizable figures like Cathie Wood, Joe Kernen, or Kevin O’Leary without their permission. Once users click these ads, they are pressured to move conversations to encrypted platforms like WhatsApp or Telegram to avoid platform moderators.

Confidence scams involve fraudsters developing trusting relationships with victims and convincing them to invest using fake platforms. Victims may be asked to invest small amounts initially, with the app showing significant profits to prove legitimacy before they invest large sums.

New Yorkers have reported losing significant amounts of money to these schemes. A former IT consultant from New Hyde Park lost more than $1.3 million after clicking a fraudulent Facebook ad falsely featuring Savita Subramanian of Bank of America Merrill Lynch.

A licensed clinical social worker from Commack lost more than $25,000 in a pump-and-dump scheme after clicking a fake ad falsely featuring Cathie Wood. An IT professional from Glen Cove lost approximately $85,000 after clicking an Instagram ad falsely featuring Dave Portnoy.

Attorney General James urged investors to scrutinize social media investment advertisements carefully. She noted that most reputable broker-dealers and investment advisors do not post specific investment advice on social media platforms.

James warned that scammers use AI-generated images or videos of famous entrepreneurs to lure victims. She advised New Yorkers to verify credentials using FINRA’s BrokerCheck and to be skeptical of promises of guaranteed returns or high-pressure tactics.

The alert emphasized that most fraudulent transactions, especially those involving cryptocurrency, are irreversible. James encouraged anyone who may have been a victim to report suspicious activity to the Office of the Attorney General online or by calling 1-800-771-7755.