It’s a hard, cold fact: fraudsters lie. That’s how they attempt to make money. They lie when they promise you “guaranteed” high returns with little or no risk. And they lie when they forget to mention that the company or product they’re touting doesn’t exist.

Some fraudsters tell straightforward lies, fabricating facts or making bogus claims. That’s why we encourage investors to do their own independent research and to remember that wonderful, timeless adage: “If it sounds too good to be true, it probably is.” Other fraudsters salt their stories with grains of truth to give their schemes an air of legitimacy. For many years, the SEC and securities regulators around the globe have been encouraging investors to investigate before they invest — to ask tough questions about their investments and the people who sell them. Taking their cue from us, some fraudsters now pretend to do the same.

One ruse fraudsters use involves assurances that an investment has been registered with the appropriate agency. The fraudsters will purport to give you the agency’s telephone number and invite you to verify for yourself the “authenticity” of their claims. But even if the agency does exist, the contact information almost certainly will be false. Instead of speaking with an actual government official, you’ll reach the fraudsters or their colleagues — who will give the company, the promoter, or the transaction high marks.

Another trick involves the misuse of a regulator’s seal. The fraudsters copy the official seal or logo from the regulator’s website — or create a bogus seal for a fictitious entity — and then use that seal on documents or web pages to make the deal look legitimate. You should be aware that the SEC — like other state and federal regulators in the U.S. and around the world — does not allow private entities to use its seal. Moreover, the SEC does not “approve” or “endorse” any particular securities, issuers, products, services, professional credentials, firms, or individuals.

Here’s how you can protect yourself against these and other deceptive tactics:

Deal Only With Real  Regulators — It’s not hard to figure out who the real regulators are and how you can contact them.

Be Skeptical of Government “Approval” — The SEC does not evaluate the merits of any securities offering, nor do we determine whether a particular security is a “good” investment. Instead, the SEC’s staff reviews registration statements for securities offerings and declares those statements “effective” if the companies appear to have satisfied our disclosure rules.

Look Past Fancy Seals and Impressive Letterheads — Most people who use computers know how easy it can be to copy and paste images. As a result, today’s technology allows fraudsters to create impressive, legitimate-looking websites and stationery at little to no cost. Don’t be taken in by a glossy brochure, a glitzy website, or the presence of a regulator’s official seal on a web page or document.

Check Out the Broker and the Firm — Always verify whether any broker offering to buy or sell securities is properly licensed to do business in your state, province, or country.

Be Wary of “Advance Fee” or “Recovery Room” Schemes — An increasing number of investment-related frauds target investors worldwide who purchase “microcap” stocks, the low-priced and thinly traded stocks issued by the smallest of U.S. companies. If the stock price falls or the company goes out of business, the fraudsters swoop in, falsely claiming that they can help investors recover their losses — for a substantial fee disguised as some type of tax, deposit, or refundable insurance bond. As soon as an unwary investor pays the “advance fees,” the fraudsters disappear — leaving the investor with even higher losses.

If you want to invest wisely and steer clear of frauds, you must get the facts. Never, ever, make an investment based solely on a promoter’s promises or what you see on the Internet — especially if the investment involves a small, thinly-traded company that isn’t well known. And don’t even think about investing on your own in small companies that don’t file regular reports with the SEC, unless you are willing to investigate each company thoroughly and to check the truth of every statement about the company.

You may think that you are anonymous as you browse web sites, but pieces of information about you are always left behind. You can reduce the amount of information revealed about you by visiting legitimate sites, checking privacy policies, and minimizing the amount of personal information you provide.

What information is collected?

When you visit a web site, a certain amount of information is automatically sent to the site. This information may include the following:

• IP address - Each computer on the internet is assigned a specific, unique IP (internet protocol) address. Your computer may have a static IP address or a dynamic IP address. If you have a static IP address, it never changes. However, some ISPs own a block of addresses and assign an open one each time you connect to the internet—this is a dynamic IP address. You can determine your computer’s IP address at any given time by visiting www.showmyip.com
• Domain name - The internet is divided into domains, and every user’s account is associated with one of those domains. You can identify the domain by looking at the end of URL; for example, .edu indicates an educational institution, .gov indicates a US government agency, .org refers to organization, and .com is for commercial use. Many countries also have specific domain names. The list of active domain names is available from the Internet Assigned Numbers Authority (IANA).
• Software details - It may be possible for an organization to determine which browser, including the version, that you used to access its site. The organization may also be able to determine what operating system your computer is running.
• Page visits - Information about which pages you visited, how long you stayed on a given page, and whether you came to the site from a search engine is often available to the organization operating the web site.

If a web site uses cookies, the organization may be able to collect even more information, such as your browsing patterns, which include other sites you’ve visited. If the site you’re vising is malicious, files on your computer, as well as passwords stored in the temporary memory, may be at risk.
How is this information used?

Generally, organizations use the information that is gathered automatically for legitimate purposes, such as generating statistics about their sites. By analyzing the statistics, the organizations can better understand the popularity of the site and which areas of content are being accessed the most. They may be able to use this information to modify the site to better support the behavior of the people visiting it.

Another way to apply information gathered about users is marketing. If the site uses cookies to determine other sites or pages you have visited, it may use this information to advertise certain products. The products may be on the same site or may be offered by partner sites.

However, some sites may collect your information for malicious purposes. If attackers are able to access files, passwords, or personal information on your computer, they may be able to use this data to their advantage. The attackers may be able to steal your identity, using and abusing your personal information for financial gain. A common practice is for attackers to use this type of information once or twice, then sell or trade it to other people. The attackers profit from the sale or trade, and increasing the number of transactions makes it more difficult to trace any activity back to them. The attackers may also alter the security settings on your computer so that they can access and use your computer for other malicious activity.
Are you exposing any other personal information?

While using cookies may be one method for gathering information, the easiest way for attackers to get access to personal information is to ask for it. By representing a malicious site as a legitimate one, attackers may be able to convince you to give them your address, credit card information, social security number, or other personal data (see Avoiding Social Engineering and Phishing Attacks for more information).
How can you limit the amount of information collected about you?

• Be careful supplying personal information - Unless you trust a site, don’t give your address, password, or credit card information. Look for indications that the site uses SSL to encrypt your information (see Protecting Your Privacy for more information). Although some sites require you to supply your social security number (e.g., sites associated with financial transactions such as loans or credit cards), be especially wary of providing this information online.
• Limit cookies - If an attacker can access your computer, he or she may be able to find personal data stored in cookies. You may not realize the extent of the information stored on your computer until it is too late. However, you can limit the use of cookies (see Browsing Safely: Understanding Active Content and Cookies for more information).
• Browse safely - Be careful which web sites you visit; if it seems suspicious, leave the site. Also make sure to take precautions by increasing your security settings (see Evaluating Your Web Browser’s Security Settings for more information), keeping your virus definitions up to date (see Understanding Anti-Virus Software for more information), and scanning your computer for spyware (see Recognizing and Avoiding Spyware for more information).