Securities regulators warn of new spin on classic scams

Emerging investment schemes have latched on to the latest headlines, featuring scams related to digital currencies and the marijuana industry, say state regulators.

Idaho Department of Finance Acting Securities Bureau Chief Jim Burns says that investors need to be wary of investment schemes that are dressed up around a new or interesting business. Sometimes these investment options are shell companies rebranding themselves to spark interest, Burns said.

“The next iteration may be Ebola vaccine companies,” Burns said.

The Department of Finance and North American Securities Administration Association released a list of the top emerging and persistent threats to investors. The emerging threats included marijuana and digital currencies, such as Bitcoin, as well as unregulated binary options securities and stream-of-income investments. Persistent threats included pyramid and Ponzi schemes, risky oil and gas drilling programs and private placement offerings.

Burns said Idaho regulators haven’t received any complaints of losses on the emerging threats, though the Department of Finance has been in contact with groups looking to raise money though virtual currency mining operations. He said some investors may have had losses on binary options, which can have an all-or-nothing payout based on whether an underlying asset like an individual stock or stock index rises or falls, but may not know if their losses are due to bad trades or fraud.

“Sometimes folks don’t when to contact us, honestly,” Burns said. The Department of Finance said investors can contact the Securities Bureau for information on those registered to sell securities or provide investment advice in Idaho.