| 05 October 2009

FINRA issued a warning to investors today about an email scam that uses FINRA's name in an attempt to gather personal information from investors. The email promises recipients they will receive $1.5 million in Auction Rate Securities (ARS) settlement funds if they submit their occupation, address and phone number.

The efforts discovered by FINRA is a version of what is called "phishing." The email tries to convince readers they are viewing an actual FINRA-sponsored communication and then attempts to fraudulently collect personally identifiable information.

In their alert FINRA clarifies that it does not contact investors directly to discuss settlements. The regulatory agency points investors to a previously published Web site with more detailed information about Auction Rate Securities settlements.

TD Ameritrade (AMTD) is among the firms that have agreed to settle with the SEC on the Action Rate Securities debacle. The market, which collapsed in February 2008, led individual investors, charities, and small business to think they had an opportunity to dabble in a space usually reserved for larger players. But rarely were they made aware of the risks involved.

The SEC has settled similar cases with Citgroup (C), Wachovia, Bank of America (BAC), RBC Capital Markets and Deutsche Bank (DB). Schwab (SCHW) is one of the last holdouts in the settlements, claiming that the collapse is the responsibility of the underwriters, not of the brokers who eventually sold the securities. New York Attorney General Andrew Cuomo filed a lawsuit against Schwab.

A copy of one of the fake emails obtained by FINRA: