Proliferation of fraudulent schemes amid COVID-19

The COVID-19 pandemic has caused a proliferation of fraudulent schemes globally, which have been pervasive in The Bahamas, according to the Securities Commission of The Bahamas (SCB).

SCB Executive Director Christina Rolle said she has personally seen instances where Bahamians have lost their life savings to Ponzi and pyramid schemes that have in recent years infiltrated the Bahamian investment market.

“During the pandemic one of the things we saw was a huge uptick – and we still see it going on – in the amount of fraudulent schemes out there. This is something all of our regulator colleagues around the world are reporting. In fact, we are on the board of the International Organization of Securities Commissions (IOSCO) and this is something that has gotten the board’s attention with the proliferation of fraudulent schemes. Certainly we have seen that it is pervasive in our market,” she said.

“One of the things the pandemic did was a lot of people were furloughed, they were out of a job and you would think that when someone doesn’t have income they would not be receptive to some of these things, but what we’re finding is that they’re more susceptible. They’re more susceptible to taking their $5,000 and putting it with someone who says they’ll grow it in 30 days.”

IOSCO stated in a recent report on its “Initial Findings and Observations about the Impact of COVID-19 on Retail Market Conduct” that members had to take additional and various steps to increase public awareness and prevent potential retail investor harm.

“During the COVID-19 pandemic, IOSCO members have increasingly been concerned about fraudulent schemes related to COVID-19, which have appeared in different forms and mainly targeted retail investors,” the international body stated.

“As distinct from conduct challenges during normal times, COVID-19 poses various issues including alternative working arrangements introduced to comply with the health measures governments have introduced. Particularly, authorities observed a significant increase in disruptions associated with operational, business continuity and cyber-security risks.”

Last week the SCB issued warnings on several companies it said may be conducting illegal activities in The Bahamas and whom members should exercise “extreme caution” toward when considering engaging.

In September, Commissioner of Police Paul Rolle said since the onset of the COVID-19 pandemic, the police force has seen a notable increase in the number of fraud and cyber crimes being investigated by the Financial Crime Investigations Unit.

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source https://thenassauguardian.com/proliferation-of-fraudulent-schemes-amid-covid-19/