A new FINRA task force is looking to ensure that investors are protected from fraud during the spread of COVID-19, according to a blog post from the regulatory agency. The task force is looking at concerns about potential fraud of brokers, issuer fraud, insider training and fraud emanating from the ongoing crisis that could target seniors.
The task force has operated remotely since late March and is headed by Greg Ruppert, who became FINRA’s executive vice president for the National Fraud and Financial Crimes Detection Programs on March 23. His career includes nearly two decades investigating financial schemes and cybercrime at the FBI and subsequently as the head of the Financial Crimes Risk Management group at Charles Schwab.
“No crisis is ever wasted by a fraudster,” Ruppert said. “Fraudsters are using the pandemic as an opportunity, so FINRA’s role in identifying fraud, acting quickly to protect investors, ensuring fair markets and providing timely information to investors, member firms, other regulators and law enforcement is essential.”
Thus far, Ruppert’s team has been seeking out fraudulent activity related to COVID-19. After uncovering suspected instances of fraud at several firms, the team shared information with FINRA’s enforcement division. The NCFC’s Fraud Surveillance group has also uncovered potential instances of public companies making potentially fraudulent claims about the coronavirus. The task force referred 50 of these instances to the SEC, who suspended trading in shares of more than 20 public companies in response.
Ruppert, who is heading the task force from home, collected members from 15 different groups within FINRA, including the Fraud Surveillance, Cybersecurity, Enforcement and Vulnerable Adults and Seniors divisions. The task force is constantly sharing its findings with the SEC, and is also collaborating with the FBI and the North American Securities Administrators Association. Ruppert said he was encouraged by the coordination he’d seen thus far and was already seeing results from their efforts.
Fraud has been a pernicious issue for consumers since the COVID-19 crisis hit American shores, with the Federal Trade Commission estimating that more than 18,000 Americans have lost approximately $13.4 million since the start of the year due to coronavirus scams. The top fraud categories included bogus text messages and imposter scams, according to CNBC.
