SEC warns investors of Relationship Investment Scams

On April 16, 2025 the Securities and Exchange Commission (“SEC”) published a press release regarding the unveiling of the Office of Investor Education and Advocacy’s (“OIEA”) new anti-fraud public service campaign. The campaign warns investors of relationship investment scams and the dangers they pose on investors’ financial future. 

Relationship investment scams are “long cons,” meaning the fraudster takes time to build trust through friendship or romantic connection. The fraudster, either using a fake identity or posing as an old acquaintance of the investor, may make initial contact via text message, social media, or other messaging application. Over a period, the fraudster the builds trust through personal, non-investment related conversation. Once trust is established, the fraudster will direct the conversation to supposed investment opportunities. 

The fraudster may claim to know profitable investment opportunities or indicate they know someone who is a financial advisor or “insider” with investment advice. Fraudsters may direct investors to a fake website that appears legitimate or even to a well-known app. However, just because the app is popular does not mean the app or activities within the app are legitimate. To bolster the scam, the fraudster may send fake screenshots or send fake training information to make the investment appear more legitimate. New artificial intelligence (“AI”) technologies can make these even more convincing. 

The SEC’s press release includes the following “[k]ey takeaways for investors” to protect themselves:

•    Ignore messages from anyone they do not know and consider blocking or deleting them.
•    Be wary of unsolicited investment opportunities, no matter how much they trust the person.
•    If they suspect they may be caught up in a scam, stop communication with the individuals immediately, and do not give them any more money.
•    Report the scam to the SEC.

For further information on how investors may protect themselves from relationship investment scams, the Commodity Futures Trading Commission’s Office of Customer Education and Outreach, the Financial Industry Regulatory Authority and the North American Securities Administrators Association have issued similar warnings and educational tips.