Internet Investment Pitches Draw Scrutiny

Federal and state regulators have examined hundreds of World Wide Web sites for bogus claims about investment opportunities and could follow up with enforcement action, officials said in Washington on Monday.

One ploy investigators uncovered is the claim that an investment is “‘IRA approved” or “IRA qualified,” said Federal Trade Commission attorney Alice Hardy. “There is no such thing. The government doesn’t review particular investments for use in individual retirement accounts.”

Lawyers and investigators for the FTC and the nation’s futures and securities regulators took a day in November to surf the Internet in search of possible fraud or improper promotion of investments.

The Web is the latest avenue for scam artists to reach potential victims, the regulators said, adding that the range of pitches involved foreign currencies, Internet-based businesses, utilities, films, restaurants and insurance settlements.

“Investigators were looking, really, for anything from registration issues to fraud and misrepresentation and everything in between,” said Geoffrey Aronow, enforcement director for the Commodity Futures Trading Commission. “We’re going to go back and examine [certain Web sites] more carefully to determine whether further inquiry is warranted.”

Said Hardy: We just want investors to be wary when, with any investment, they are promised guaranteed returns with little or no risk.”

Possible penalties include fines and injunctions ordering the Web sites to close up shop. The FTC refers appropriate cases to criminal prosecutors, Hardy said.