FINRA, SEC Warn Investors against Oil Spill Scams

The Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) today warned that investors should watch for scams promising financial gains from investments in companies that claim that be involved in cleanup operations in the Gulf. 

The regulators noted that millions of dollars are being spent daily on short-term cleanup of the spill, which began in April with a blowout at an oil-drilling platform off the coast of Louisiana. The alert warned investors about potential scams exploiting the oil spill and related cleanup efforts. “While some of the companies touting their role in the cleanup may be legitimate, others could be bogus operations that are only looking to clean out unsuspecting investors,” the alert said.

The SEC recently suspended trading in shares of ACT Clean Technologies Inc., of Huntington Beach, California, because of questions about the accuracy and adequacy of publicly disseminated information about ACT’s cleanup technology.

Warning Signs

The investor alert said some companies might issue issue press releases, or send unsolicited faxes or spam emails that might include:

• claims to have products or technologies that are effective in remediating oil spills or restoring the eco-system;
• mention of contracts or expected contracts with BP that would aid the cleanup effort;
• claims that the company is providing technical assistance or expertise to BP or to U.S. government agencies such as the Coast Guard or the Environmental Protection Agency;
• predictions of rapid, exponential sales growth;
• pressure to invest immediately.

For more information about how to avoid getting scammed, investors can view the Investor Alert.