UpFront » News

Impersonation scams that pose as executives and staff of well-known money managers and hedge funds are popping up across social media platforms and instant messaging apps. In most cases, the scams seek to commit fraud by offering phony investment opportunities by the firms and individuals they are impersonating. FrontLine Compliance Founder and President Amy Lynch expects these types of investment scams to grow amid the rise of AI and new technologies. Ms. Lynch comments that with the adoption of AI into mainstream business communications, deep fakes will continue to proliferate. As an example, she cites how it will become extremely difficult to know the difference between a fake video and a real one. Ms. Lynch further states that firms will need to have even more disclosures on their websites to address potential scams, while dealing with the expansion of AI by updating policies and procedures. Regulators have issued warnings about the scams and cautioned investors, and the SEC has recently updated its list of unregistered soliciting entities and impersonators claiming to be genuine US registered firms and regulators. See Pensions&Investments (subscription required), “A growing wave of social media scammers are impersonating hedge funds. AQR, Baupost are among the targets.”