Post-Hurricane Investment Scams

Speculation on rising energy prices, after hurricanes like Katrina, make it easy for phony financiers to trick investors

Immediately following hurricane Katrina in 2005, the US Government began alerting people in the investment community to unscrupulous financiers using speculation on quickly rising energy prices to garner new investments. It's not uncommon to have fraudsters rush in after an event like hurricane Katrina when it's so easy to repackage old tried and true scams to fit the news of the day.

Modern technology makes it easier than ever for scammers to attract investors. Email is a popular way they reach out to the investment community. Their email messages make claims like "due to a spate of refinery glitches and an unusually active hurricane season, investors can make more than double their investment in specified penny stocks in just a few days." Be especially aware of these emails if they contain the following text...

"This one is certainly worth watching All Week!! You may want to act very early tomorrow morning."

According to the SEC these types of email spam blasts will target senior citizens in particular. They spread quickly via email, junk fax and through boiler room schemes using telephone cold-call lists.

Unfortunately, the information sent by these con artists, while fraudulent, often contains just enough of a hint of the truth that they're easy to fall prey to. Immediately prior to and following the hurricane Katrina disaster, oil did increase in value due to speculation in the oil markets. However, any investor taking these phony financiers up on their offers won't be seeing any returns.

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