HK Investment Scams Getting More Sophisticated, Warns SFC

by Mary Swire, for LawAndTax-News.com, Hong Kong

28 March 2008

The Securities & Futures Commission is warning investors in Hong Kong to be more vigilant as fraudsters are getting more sophisticated, with scams appearing in many new guises amid increasing market volatility.

In its Dr Wise column published online on Wednesday, the Commission suggested that fraudsters have been quick to repackage their investment scams, and use more sophisticated methods to lure investors.

As in the past, fraudsters normally pose as licensed brokers or investment advisors, and prey on investors looking for investments with very attractive returns.

Some fraudsters disguise their true identity and give their scam credibility by using fake broker or investment advisor licences. They make their scams more credible by, for example, creating fake corporate websites and giving links to fake regulatory sites.

Fraudsters typically contact investors touting stocks, and trying to lure them into opening stock accounts. In many cases, the scams are exposed by investors checking the Commission's website to verify the identity of the suspected person or company.

The Commission went on to warn investors against any suspect operations or individuals that it has become aware of through its alert list, which currently contains more than 450 names.

To protect themselves against such scams, investors must verify with the proper authorities the identity of any suspected person or firm. When verifying information, investors must not rely on details provided by brokers or investment advisors, the SFC added.

Investors should also ignore cold calls and report all suspicious activities to Police, the commission or the Monetary Authority. They must also not give away personal records or send any money until the operation is confirmed legitimate, the Commission concluded.

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