The North American Securities Administrators Association (NASAA) issued an investor advisory today warning about an increase in energy independence related scams.
NASAA said Tueday that, with growing demand for energy independence globally, investments in traditional and alternative energy resources are being heavily promoted, and increasingly attractive to both investors and con artists. The regulatory group reports that its most recent enforcement survey found that oil and gas investments are the fourth most common product at the heart of state securities enforcement cases, with about 40% of responding jurisdictions reporting energy-related enforcement cases.
In its advisory, NASAA explains the most common ways energy investment products are offered, why investors need to be cautious, and how they can protect themselves when considering energy investments.
“Many of these investments are highly risky and illiquid and therefore are not appropriate for many investors,” said Heath Abshure, NASAA president and Arkansas securities commissioner. “It is not unusual for unscrupulous promoters to use the lure of current events or innovative technologies to take advantage of unsuspecting investors by engaging in fraudulent practices.”
Abshure said promoters sometimes prey on investors interested in socially responsible products by labeling them as ‘green energy’ investment opportunities, implying that they are ecologically friendly. “In some cases, the promoters may be operating a fraudulent shell company and not producing anything,” it warns.