COVID-19: Investment fraud, cyber scam warnings

Criminals are taking advantage of the COVID-19 outbreak to carry out investment frauds and scams.

The International Chamber of Commerce Commercial Crime Services says scammers are taking advantage of the COVID-19 outbreak to carry out investment frauds.  Such frauds involve claims that a company’s products or services will be used to help stop the COVID-19 pandemic, according to an alert issued by the United States’ Securities and Exchange Commission (SEC).

“We have become aware of a number of Internet promotions, including on social media, claiming that the products or services of publicly-traded companies can prevent, detect, or cure coronavirus, and that the stock of these companies will dramatically increase in value as a result,” the SEC said.  The promotions often take the form of so-called “research reports” and make predictions of a specific “target price.”

SEC is urging investors to be wary of such claims and to be aware of the huge potential for fraud at this time.  Specifically, it calls for caution over offers that involve microcap stocks, usually made as part of fraudulent “pump-and-dump” schemes.

The SEC’s warning has been echoed by the Federal Trade Commission (FTC) which says fraudsters are setting up websites to sell bogus products, and use fake emails, text messages and social media posts to take money and steal personal details.  “The emails and posts may be promoting awareness and prevention tips, and fake information about cases in your neighborhood.  They also may be asking you to donate to victims, offering advice on unproven treatments, or contain malicious email attachments,” FTC says.

Malware and phishing scams

Meanwhile the Center for Internet Security (CIS) also warns of cyber threat actors leveraging on the outbreak to conduct financial fraud and disseminate malware.  CIS’ Multi-State Information Sharing and Analysis Center has noted recently the registration of names containing the phrase “coronavirus.”  

The Center said the majority of these new domains include a combination of the words “help,” “relief,” “victims,” and “recover” and should be viewed with caution. Also, malicious actors are likely to post links to fake charities and fraudulent websites that solicit donations for relief efforts or deliver malware.  

Similar scams and malware dissemination campaigns were seen in response to previous high-profile events including Hurricane Harvey, the Boston Marathon bombing, the Royal Wedding, and the Tennessee wildfires.  “We expect that this trend will continue with the emergence of new and recycled scams involving financial fraud and malware related to the coronavirus outbreak,” the Center said.

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