In addition to its many positive applications, it’s becoming increasingly clear social media is a fertile field for all different sorts of fraud, including financial fraud on a mind-boggling scale that would make Bernie Madoff proud.
One Anthony Fields, 54, a certified public accountant in Lyons, Illinois, tried to sell over $500 billion worth of fake securities via social media, according to the Securities and Exchange Commission, which accused Fields of peddling bogus “bank guarantees” and “medium-term notes” on social media sites including LinkedIn. To lay the groundwork for his fraudulent business, Fields created two companies, Anthony Fields & Associates and Platinum Securities Brokers, and created a false online paper trail detailing assets he supposedly had under management for “pooled fund vehicles, companies, and high net worth individuals,” along with a fictitious list of past clients and other background details to convince potential dupes that he was legitimate. Among other things, Fields claimed to have $400 million currently under management, as well as a $50 billion contract to trade U.S. Treasury securities; as Josef Goebbels put it, “in the big lie there is always a certain force of credibility.”
While Fields (who didn’t have the requisite broker’s credentials) failed to actually sell any of his fraudulent financial wares, he apparently received expressions of interest from potential buyers, and the case stands as a warning to investors and others that “fraudsters are quick to adapt to new technologies to exploit them for unlawful purpose,” according to Robert Kaplan, co-chief of the SEC Enforcement Division’s asset management unit.
With cases like this popping up, it’s no surprise that the SEC is encouraging financial professionals to adhere to stringent standards for their social media communications -- and new social media companies are emerging to fill this demand.
In a previous column I wrote about a new social media toolkit created for the financial services industry by Faulkner Media Group, whose FMG Social product is designed to help financial professionals boost retention rates and accelerate prospecting efforts, all in compliance with the guidelines and statutes enforced by the Financial Industry Regulatory Authority (FINRA). As part of the FINRA-compliant service, FMG Social automatically sends an ongoing series of FINRA-reviewed social posts to Facebook, LinkedIn, and Twitter on behalf of financial professionals. Each of the posts links visitors to a video, article, or calculator that appears on the financial professional’s website or an FMG-provided web landing page.