The North American Securities Administrators Association is warning investors, without apparent irony, to beware of phantom regulators.

NASAA warns that there are con artists posing as securities regulators. Franklin Widmann, chief of the New Jersey Securities Bureau and president of the NASAA, reports that several fake “regulators” have been brought to the attention of state securities regulators. These “regulators” claim to be based in the U.S. and often target overseas investors.

Widmann identified a number of phantom “regulators,” including: the Regulatory Compliance Commission, the International Regulatory Commission, the International Compliance Commission, the International Shareholder Protection Division and the International Exchange Regulatory Commission. Each of these entities had websites and listed addresses and telephone numbers in the US and none have any relation to real regulatory agencies or organizations.

“Some of these websites may look very legitimate but all successful scams do, at first. These websites offer nothing more than fancy window-dressing to lure investors into buying worthless securities from unlicensed stockbrokers,” Widmann said, adding that these brokers and offers are often “verified” by the phony regulators.

Widmann said investors lose billions of dollars a year to securities fraud overall and he warned, “There are probably many more fake regulators with websites and shell offices like these. The Internet is a big place, making it difficult to police, and sometimes dangerous for investors.”

NASAA listed its top five warning signs of a phantom regulator: no references to them on any other regulatory websites, such as that of the International Organization of Securities Commissions; they endorse or approve any investment opportunity, stock, or company; they say that paying a fee to “release restricted shares” is anything other than an attempt to steal your savings; little or no information about the “regulator” appears in Internet search engines; and, other regulators say they have “never heard of them”.

“The U.S. securities markets are known around the world for being among the safest and most fair, due in no small part to the rigorous and efficient regulatory systems in place here. Con artists are trying to cash in on our good name abroad to lure unsuspecting investors into risky penny stocks and advance fee schemes,” Widmann said.