Attorney General William Tong today warned Connecticut consumers about the increasing prevalence of sophisticated investment scams operating through Facebook, Instagram, and WhatsApp. The schemes include "pump and dump" operations, confidence scams, and fraudulent cryptocurrency platforms that use advanced technology including AI-generated deepfake videos of celebrities to lure victims.
"Scammers are using sophisticated tools like deepfakes and targeted ads to exploit trust and steal people's life savings. If an investment opportunity is coming to you through social media, stop and take a closer look. Most legitimate advisors are not pitching investments this way," said Attorney General Tong, emphasizing that reputable broker-dealers typically do not post specific investment advice on social media platforms.
The pump and dump schemes follow a three-step process where scammers use fake ads featuring recognizable figures like Cathie Wood or Kevin O'Leary without permission, then pressure victims to move conversations to encrypted platforms like WhatsApp before funneling them into group chats with false testimonials. In confidence scams, fraudsters develop trusting relationships with victims through fake investment platforms that initially show profits before ultimately draining accounts when victims attempt to withdraw funds.
The warning builds on Tong's ongoing anti-fraud efforts, including a January partnership with AARP Connecticut for a statewide PSA featuring a Connecticut resident who lost nearly $1 million to an online romance and cryptocurrency scam. The alert comes as social media investment fraud has become increasingly sophisticated, with scammers using AI technology to create convincing deepfake videos and clone legitimate trading platforms.
Tong advised consumers to verify credentials through official databases, search for reviews using terms like "scam" or "complaint," and be wary of guaranteed returns or high-pressure tactics. He specifically warned about requests to use cryptocurrency ATMs or move conversations to encrypted messaging platforms as major red flags.
The Attorney General emphasized that most fraudulent transactions involving cryptocurrency are irreversible and warned consumers about secondary scams involving purported "asset recovery specialists" who promise to retrieve lost funds for additional fees. Connecticut residents who believe they have been victims of these scams are encouraged to report incidents through the Attorney General's website at www.ct.gov/agcomplaints.