I happened to stumble (it was 2 a.m.) over something from our good friends at the Securities & Exchange Commission that woke me up and kept me awake for the rest of the night. The SEC launched a series of Web sites designed to warn investors who rush into investment opportunities on the Internet. What's this? A site to warn investors? I dug deeper.
According to the agency, they decided to borrow tactics of the stock market con artists (ah, now it's getting interesting) by setting up Web sites that offer tremendous financial gains. Whoa, Nelly. In reality, it's a fake scam site and coming from the government no less. Talk about truth in advertising. Okay, here's the way it works.
The SEC unveils a fake scam site accompanied by a "spoof" press release. The release, seemingly issued by a certain company, boasts that the SEC has "pre-approved" the fictitious company's initial public offering. You following me? Good. I'm starting to get lost. What I did know and which helped get me back on the right road, is that the SEC does not "pre-approve" IPOs.
So, this press release gets distributed to hundreds of Web sites and Internet portals as part of the SEC project. As a result, the site receives more than--catch this--150,000 hits in just three days.
The SEC chairman, Harvey Pitt, says he is "thrilled with the response."
The site features an audio interview with the CEO of this so-called company as well as "testimonials" from a Wall Street securities analyst, a Fortune 100 CEO, and a company customer. Apparently the "company" claims to have developed a handheld, battery-powered biohazard detection device that emits an audible beep and flashes when in the presence of all known biohazards. The company says that in three months investments will leap 400 times. I reach for my checkbook.
So, what happens? Well, anyone who tries to invest is instead led to a page that warns, "If you responded to an investment idea like this, you could get scammed!" The page also tells investors how to research investment offers and where to call for help.
It's quite an idea, eh? Hollywood couldn't have done it better. And to boot, the SEC received cooperation from the National Association of Securities Dealers, the Federal Trade Commission, the North American Securities Administrators Association, and PR Newswire.
Mr. Pitt is quite pleased about all this. "In a perfect world, everyone would read our educational brochures before they ran into a scam, but they don't. What we're trying to do is warn investors while their guard is down. The next time, when they encounter a real scam, these investors won't let excitement cloud their better judgment."
Hey, Maybe Harvey is in the wrong area. Pitt for FBI Director. Sounds good to me.
