Ebola Related Scams

~ By Gerald Rome, Colorado Securities Commissioner ~

Gerald Rome

Gerald Rome

Recent coverage of the Ebola outbreak both in the U.S. and abroad has certainly caught the public’s attention.  Another, less obvious group, has surely taken note of the deadly disease.  Past experience tells us that periods of uncertainty or fear are prime time for con artists looking to make a quick score. These stock scammers will be looking to capitalize on the front page headlines and the public’s attention of the Ebola epidemic in west Africa and the potential here in the U.S. You should approach any unsolicited Ebola-related investment opportunity with caution, especially those received through the Internet.

How do we know this?  Well, state securities regulators recently analyzed Internet domain names and found that nearly 1,200 domains with “Ebola” in their name have been registered with top-level domains, such as .com, .net, and .org since April 2014. About 1,000 of those registrations have occurred since July, as awareness of the crisis spread. Of these sites, 184 were identified by regulators as suspicious. A review of Ebola-related domain names found several with the words “fund,” “invest,” “stock,” or “futures” in their titles. For example, the following domain names have been registered: hotebolastocks.com; bestebolastocks.com; ebolafutures.com; ebolainvesting.com; ebolaoutbreakstocks.com; ebolastocks.com; and fundsforebola.com. Most of the domain names are “parked” and have no content, indicating that either someone has purchased the domain hoping to re-sell it, or that the content is not yet posted.

Here are some tips to avoid a potential Ebola stock scam.

  • Consider the source. Investors should be skeptical of press releases, emails, and promotional materials from unknown senders hyping a company and its products.
  • Do some investigating. Find out who is controlling the company before you invest. A basic internet search is a great place to start. You should proceed with caution if you discover indictments or convictions of company officials or news reports that raise red flags.
  • Be wary of frequent changes to a company’s name or business focus. Frequent name changes or changes to a company’s business focus may be a sign that a company is engaged in a potential fraud. Watch out for companies that change their name or tout new disease-prevention product lines following extensive media coverage about a potential outbreak.
  • Don’t fall for name dropping. Citing a relationship with a government agency, prominent company, or academic institution may be a ploy to create legitimacy for a company that does not deserve it. Be skeptical about these claims and try to confirm their authenticity.

And anytime you are suspicious of a company or think you might have run across a scam, please contact us at the Colorado Division of Securities at (303) 894-2320.

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