|
SEC: Anthony Fields of
Lyons in Social Media Scam January 5, 2012
 The
Securities and Exchange Commission charged an Illinois-based investment
adviser with offering to sell fictitious securities on LinkedIn and
issued two alerts in an agency-wide effort to highlight the risks
investors and advisory firms face when using social media.
The SEC’s Division of Enforcement alleges that Anthony Fields of Lyons,
Ill. offered more than $500 billion in fictitious securities through
various social media websites. For example, he used LinkedIn discussions
to promote fictitious “bank guarantees” and “medium-term notes.” The
postings resulted in interest from multiple purported potential buyers.
“Fraudsters are quick to adapt to new technologies to exploit them for
unlawful purposes,” said Robert B. Kaplan, Co-Chief of the SEC
Enforcement Division’s Asset Management Unit. “Social media is no
exception, and today’s enforcement action reflects our determination to
pursue fraudulent activity on new and evolving platforms.”
According to the SEC’s order instituting administrative proceedings
against Fields, he made multiple fraudulent offers through his two sole
proprietorships – Anthony Fields & Associates (AFA) and Platinum
Securities Brokers. Fields provided false and misleading information
concerning AFA’s assets under management, clients, and operational
history to the public through its website and in SEC filings. Fields
also failed to maintain required books and records, did not implement
adequate compliance policies and procedures, and held himself out to be
a broker-dealer while he was not registered with the SEC.
One of the alerts issued today – a National Examination Risk Alert
titled “Investment Adviser Use of Social Media” – provides staff
observations based on a review of investment advisers of varying sizes
and strategies that use social media. In growing numbers, registered
investment adviser firms are using social media to communicate with
existing and potential clients, promote services, educate investors, and
recruit new employees.
“As investment advisers increasingly utilize social media to communicate
with clients and potential clients, firms need to be mindful of the
applicable standards governing those communications,” said Carlo di
Florio, Director of the Office of Compliance Inspections and
Examinations (OCIE).
 The
alert reviews concerns that may arise from use of social media by firms
and their associated persons, and offers suggestions for complying with
the antifraud, compliance, and recordkeeping provisions of the federal
securities laws. The alert notes that firms should consider how to
implement new compliance programs or revisit their existing programs in
the face of rapidly changing technology.
The SEC also issued an Investor Alert titled “Social Media and
Investing: Avoiding Fraud” prepared by the Office of Investor Education
and Advocacy. The alert aims to help investors be better aware of
fraudulent investment schemes that use social media, and provides tips
for checking the backgrounds of advisers and brokers. A new Investor
Bulletin titled “Social Media and Investing: Understanding Your
Accounts” contains best practices including privacy settings, security
tips, and password selection aimed to help social media users protect
their personal information and avoid fraud.
“More and more, investors are using social media to help them with
investment decisions. While social media can provide many benefits for
investors, it also makes an attractive target for fraudsters. The
Investor Alert provides some useful tips to help investors look out for
securities fraud online,” said Lori J. Schock, Director of the Office of
Investor Education and Advocacy. |
