The SEC just issued an Investor Alert regarding what it calls Affinity Fraud. Investor Rights attorney Chris Vernon says it is all too common and refers to it as “Fraud Among Friends.” Vernon says “Whether you’re a Rotarian, a Christian, a hard-core tennis pro, or member of any other group, you let your guard down when you are being pitched investments by a member of your own group. Your guard drops even further when the referral is from a friend.
According to Vernon, “…Even though your friend or fellow member may be well-intentioned, your friend may not know ‘Joe’ is a bad guy — Scam artists often go to great lengths to build relationships in the country club, the church, civic association, or charity.” A more extensive discussion of this topic is part of the 2012 Naples Daily News interview of the lawyers at Vernon Litigation Group.