Impersonation Scams: How Fraudsters Pose as the SEC, FINRA, and Brokers

How Impersonation Scams Work

Impersonation scams follow a predictable pattern. The scammer contacts you claiming to be from a trusted institution. They create a sense of urgency — your account is compromised, there is suspicious activity, you are being investigated, or you owe money. They request sensitive information — your account number, Social Security number, password, or 2FA code. They may demand payment — through wire transfer, gift cards, cryptocurrency, or a prepaid debit card. They threaten consequences — account closure, arrest, fines, or legal action if you do not comply. The scammer uses caller ID spoofing to make the call appear to come from the legitimate institution. They may reference real information about you (obtained from data breaches) to appear credible. The goal is to get you to act emotionally rather than rationally. The best defense is to stop, verify independently, and never provide sensitive information in response to an unsolicited contact. Learn about advance fee fraud →

Fake SEC Officials Demanding Payment

The SEC has issued multiple investor alerts warning that scammers impersonate SEC officials. The scammer calls or emails claiming to be from the SEC's Enforcement Division. They may say you are being investigated for securities fraud, that your assets are about to be frozen, or that you owe fines or penalties. They demand payment — usually through wire transfer, cryptocurrency, or gift cards — to "resolve" the matter. They may threaten arrest if you do not pay. The SEC's official position: SEC employees never call investors demanding money or threatening arrest. If you receive such a call, hang up immediately and report it to the SEC at (800) 732-0330 or through the SEC's online complaint center. The SEC also warns that scammers create fake SEC websites and email addresses that look official. Always verify the authenticity of any SEC communication by contacting the SEC directly through official channels. Learn about identity theft protection →

Pig Butchering and Recovery Room Variations

Impersonation scams often intersect with other types of fraud. In the "pig butchering" variant, scammers build a relationship with the victim and then pitch a fake crypto investment platform. When the victim tries to withdraw funds, a scammer posing as a "regulator" contacts them claiming the platform has been "seized" and their funds can be released after paying a "recovery fee." In "recovery room" scams, a scammer impersonating a lawyer or law enforcement officer contacts victims of previous scams, offering to recover their lost funds for an upfront fee. The recovery scammer is often the same person who ran the original scam or a different scammer who purchased the victim's contact information from the original fraudster. If someone contacts you offering to recover lost investment funds, it is almost certainly a recovery scam. No legitimate recovery service charges upfront fees. Report such contacts to the FBI's IC3. Learn about relationship investment scams →

Threat Scams: Sextortion, Arrest Threats, and Legal Intimidation

Threat scams are a particularly terrifying variant of impersonation fraud. The scammer contacts the victim claiming to have compromising information — such as evidence that the victim visited adult websites, a recording of them watching pornography, or data from a hacked device. The scammer threatens to release this information to the victim's family, friends, or employer unless a ransom is paid, typically in cryptocurrency or gift cards. In another variant, the scammer impersonates a law enforcement officer or government official and claims the victim has an outstanding warrant, has committed tax fraud, or is being investigated for money laundering. The scammer demands immediate payment to avoid arrest. These scams create intense fear and urgency, which is precisely how they bypass the victim's rational judgment. The reality is that the scammers do not have compromising information — they send mass emails or make mass calls hoping to find someone who will panic and pay. The FBI reports that sextortion scams have increased dramatically, with losses exceeding $100 million annually. If you receive a threat scam message, do not pay. Do not engage with the scammer. Report the threat to the FBI's IC3 at ic3.gov and to local law enforcement. If the threat involves sharing intimate images, also report to the CyberTipline at missingkids.org. In almost all cases, the threat is empty and no information will be released. Paying only confirms to the scammer that you are a viable target, and you will likely be targeted again with escalating demands. Learn about account protection →

How to Verify Identities

SEC Contact Information

The SEC's main phone number for investor assistance is (800) 732-0330. If someone claiming to be from the SEC contacts you, hang up and call this number to verify the communication. The SEC's official website is sec.gov. All legitimate SEC email addresses end in @sec.gov. The SEC does not make unsolicited calls demanding payment. If you receive a call from someone claiming to be from the SEC, assume it is a scam until you verify through official channels.

FINRA's BrokerCheck

FINRA BrokerCheck (brokercheck.finra.org) is a free tool that allows you to verify the background and credentials of any licensed broker or brokerage firm. Enter the person's name or firm name to see their employment history, licenses, disciplinary actions, customer complaints, and regulatory actions. If someone claiming to be a broker contacts you, verify them through BrokerCheck before sharing any information. Legitimate brokers are registered with FINRA and will have a verifiable record. Scammers impersonating brokers will have no record in BrokerCheck. Learn about microcap stock fraud →

SEC's Investment Adviser Public Disclosure

The SEC's Investment Adviser Public Disclosure (IAPD) website (adviserinfo.sec.gov) allows you to verify investment advisers and check their disciplinary history. Enter the adviser's name or firm name to see registration status, disclosures, and disciplinary history. Legitimate investment advisers are registered with the SEC or state securities regulators and will appear in IAPD. If someone claiming to be an investment adviser cannot be found in IAPD, they are likely operating fraudulently. Always verify before investing.

Protecting Yourself and Reporting

Never share account credentials, passwords, or 2FA codes with anyone who contacts you — regardless of who they claim to be. Legitimate financial institutions and regulators will never ask for your password or 2FA code. If you suspect an impersonation scam, stop communication immediately. Contact your financial institution using the number on your statement (not any number the scammer provides). Report the scam to the SEC at (800) 732-0330 and to the FBI's IC3 at ic3.gov. If you have already sent money, contact your bank or cryptocurrency exchange immediately to attempt to reverse the transaction. Keep records of all communications with the scammer — phone numbers, email addresses, and any information they provided. These records can assist law enforcement investigations. Impersonation scams are increasingly sophisticated, but the basic defense remains the same: verify independently before taking any action based on an unsolicited communication. Learn how to protect your accounts →

What should I do if someone impersonating the SEC contacts me?

If someone claiming to be from the SEC contacts you, do not provide any personal information. Hang up or delete the email. Report the contact to the SEC's Office of Investor Education and Advocacy at (800) 732-0330 or through the SEC's online complaint form. The SEC tracks impersonation attempts and coordinates with law enforcement to prosecute scammers. The SEC also recommends reporting the scam to the FBI's IC3 and the FTC. If the scammer attempted to contact you via phone, also report the phone number to your carrier as a spam or scam number. Remember: the SEC does not make unsolicited calls demanding payment or threatening legal action. Any such communication is fraudulent.

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