Home Breadcrumb caret Industry News Breadcrumb caret Industry As market volatility increases, so can fraud Investors may be particularly vulnerable to scams right now, FINRA says By James Langton | February 28, 2020 | Last updated on February 28, 2020 1 min read © Adrian Niederhaeuser / 123RF Stock Photo Investment fraud is relentless, but investors may be particularly vulnerable to scammers when markets are tumultuous, warns the U.S. Financial Industry Regulatory Authority (FINRA). The U.S. self-regulatory organization published an alert on Friday that aims to help investors navigate rocky markets. It noted that while fraudsters operate in all market conditions, when market volatility is high, investors may be more susceptible to scams that promise “risk-free” returns. “Combining a guarantee with a specific amount of money you will make is a highly effective tactic known as phantom riches,” it said. FINRA also said that volatile markets can reveal concentration risk in investors’ portfolios. It advised investors to take various steps when markets are troubled, including revisiting their financial goals and automating savings or debt payments. “Good financial goals, tied to a sound long-term financial plan, typically will survive short-term market ups and downs,” it said. James Langton James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994. Save Stroke 1 Print Group 8 Share LI logo