thecoinrepublic.com
- An alleged Craiglist posed as a well-known financial firm and targeted potential San Antonio investors
- Because of the rise of retail investors, impersonation scams have become more common in the last 12 to 18 months
- In reality, the Keye Midas sales agent and his real managers had no connection to Ark Invest
According to an emergency cease and desist order issued by the Texas State Securities Board on Thursday, an alleged Craigslist fraud targeted would-be investors in San Antonio by posing as a well-known financial firm. According to enforcement director Joe Rotunda, so-called impersonation scams have become more common in the last 12-18 months, possibly due to the rise of retail investors and the skyrocketing value of cryptocurrencies. The board’s order accuses a company called Keye Midas Wealth Management and its affiliates of pushing a bogus cryptocurrency product that promised risk-free profits of 40% per month.
A fictitious representative from Ark Invest
A sales agent for Keye Midas allegedly advertised the scheme on Craigslist in San Antonio while impersonating a representative from Ark Invest, a legitimate $22 billion company that has exploded in popularity among retail investors in recent years. Last year, Ark Invest’s exchange-traded funds were among the best-performing on Wall Street.
In reality, the Keye Midas sales agent and his real managers had no connection to Ark Invest. Instead, the group is described as the financial equivalent of a ghost in the order. According to the order, Keye Midas has no actual business records and has taken pains to conceal its actual physical location and those who manage it, despite the fact that its website describes it as a national investment firm incorporated in Delaware, based in California, and with offices in several other states.
Even unsophisticated scammers can now put together flashy internet sites that suggest credibility, according to Rotunda, who also helps run the North American Securities Administrators Association’s enforcement section. More recent factors from the pandemic era are fueling the rise. The exponential growth of cryptocurrencies, a loosely regulated frontier in finance that has provided a convenient narrative for con artists, is one of them. In June 2020, Bitcoin was worth more than $9,000 USD. It has nearly quadrupled in value to nearly $39,000 in the year since, with a high of nearly $59,000 in March.
Keye Midas’ deceptive promises
The board accuses Keye Midas of illegally soliciting investments in various unregistered investment plans, in addition to the San Antonio postings. The Great Mogul, Excelsior, Idol’s Eye, and Regent opportunities were some of the names used to promote these phoney products. According to the order, Keye Midas advertised the plans as having up to 80% returns in as little as six months and a money-back guarantee. In Texas, none of the plans were registered or permitted for sale, and none of the parties were licenced to sell securities.
According to Rotunda, the Texas State Securities Board opens 350-400 cases a year, each with at least one fraudulent scheme and potentially dozens of victims. Between 2010 and 2019, the board returned over $45 million to investors and over $36 million to the state. Keye Midas’ listed contact information did not respond to requests for comment.