Scammers Impersonating SEC Officials Defraud Investors


The US Securities and Exchange Commission (SEC) headquarters

Internal documents from the US Securities and Exchange Commission expose instances where fraudsters have pretended to be commissioners and high-ranking officials, deceiving victims into giving away tens of thousands of dollars.

The US Securities and Exchange Commission (SEC), responsible for overseeing markets and safeguarding investors, frequently alerts the public about various scams, such as get-rich-quick schemes and penny stock frauds. However, many are unaware that the agency's own staff, including commissioners, have been targeted by fraudsters for years, often flying under the radar.

Recently, the SEC's FOIA office responded to a request made nearly two years ago for final reports of investigations conducted by the agency's internal watchdog, the Office of Inspector General, regarding security breaches, threats, and whistleblower retaliation. The provided documents, albeit partially redacted, shed light on a series of elaborate scams investigated between 2020 and 2022.

In one instance, former Commissioner Elad Roisman narrowly avoided falling victim to a scam that could have resulted in the redirection of his salary. On September 22, 2019, the SEC's Office of Information Technology notified Roisman of a request to change his login credentials, which he confirmed had not originated from him. Two days later, a scammer impersonating Roisman emailed the SEC's human resources department from a Charter Communications account, requesting a blank direct deposit form to reroute Roisman's government salary to an unrelated American Express account in Salt Lake City.

Despite the employee's usual caution when responding to unfamiliar email addresses, they complied with the request under the assumption of its legitimacy due to Roisman's high-ranking position. This incident was subsequently investigated by the inspector general's office, with the employee explaining that they did not want to delay a response given Roisman's status as a commissioner.

Just in time, the SEC intervened to halt the transfer of Elad Roisman's paycheck to the fraudulent account and safeguarded his account. This action was triggered when another SEC employee, while confirming the direct deposit change with Roisman's staff, discovered that Roisman had not initiated any alterations to his account.

Despite a year-long investigation by the inspector general that traced the perpetrator's email and bank account, the inquiry reached a dead end, and the Covid-19 pandemic impeded further pursuit of leads. Ultimately, the US Attorney's Office in Washington, DC declined to prosecute the case, citing the lack of any "monetary loss."

While the fraudster attempted to defraud Elad Roisman, another SEC Commissioner, Hester Peirce, was targeted in an impersonation scam. Bogus brokerage firms sent emails to at least five individuals in the UK, falsely claiming that legitimate companies they were invested in were undergoing a "hostile takeover." The victims were instructed to transfer a total of $35,000 to bank accounts in the Philippines and Indonesia to cover fees before accessing proceeds from securities transactions.

The victims received further correspondence from the fraudulent brokerage firms, including letters bearing Peirce's forged signature, falsely stating that the SEC would facilitate the transactions. One of these letters purported to be from the "SEC Office of Foreign Assets Control," a nonexistent office within the SEC, although the Treasury Department does have such an office.

The second wave of correspondence raised suspicions among the victims, prompting one of them to reach out to Hester Peirce's SEC email address to inquire about a letter they had received purportedly signed by her. Peirce's staff forwarded the email to the inspector general, initiating the investigation. Several months later, additional victims who had received similar suspicious letters lodged complaints with the agency.

In early 2021, the inspector general made a request through Interpol to law enforcement in the Philippines and Indonesia for information regarding the bank accounts in those countries. Interpol indicated that obtaining information from the authorities could take a year or longer, "if information was available." Ultimately, in January 2022, the inspector general closed the investigation due to a lack of actionable leads.


The Office of Inspector General operates a hotline where individuals can report anonymously by calling a number or filling out a form. In August 2020, during the same period as other investigations, a complaint was filed alleging victimization in an "advance fee fraud scheme." The complainant stated they received two emails from someone impersonating Pete Driscoll, then the SEC's director of the exam division.

The victim claimed the impersonator, using the email address, defrauded them of "at least $400,000" for a "License Trading Certificate" and later requested an additional $120,000. During an interview with an agent from the inspector general's office, the real Driscoll recalled receiving several calls from an unfamiliar California number, which redirected to his SEC office number and SEC iPhone. The caller inquired about the necessity of paying money for a "license certificate," mentioning receipt of a letter signed by Driscoll demanding payment.

After receiving the caller's email with the letter, Driscoll examined it and informed the caller that the SEC email address from which the letter originated was not legitimate, advising her not to send any money. Driscoll confirmed to investigators that he had never spoken with the individual before receiving the call, and that he neither authored nor signed the letter she received. The alleged victim revealed to the inspector general's agent that she ultimately sent the Driscoll impersonator as much as $1 million.

The inspector general forwarded the case to the US Attorney's Office for the Central District of California, which considered it for prosecution. However, prosecutors requested evidence of the payments before proceeding. Initially, the woman agreed to provide evidence supporting her claims to the inspector general. However, after three unsuccessful attempts to obtain proof of the payments, she declined to provide further information. Consequently, the investigation was closed.

An SEC spokesperson informed FOIA Files that the agency is committed to protecting investors from scams by utilizing all available tools, including educational resources and investigating wrongdoing. The SEC encourages investors to report any suspicions of misconduct by submitting tips, complaints, and referrals.

“It’s called satire”

Commissioner Peirce found herself entangled with fraudsters once more, but this time the issue revolved around a potential breach of her Twitter account. Here's the sequence of events: In December 2020, the SEC charged cryptocurrency firm Ripple Labs Inc. with violating securities laws concerning the sale of its XRP coin. Following this, the crypto community launched a social media assault on the SEC and its commissioners.

A few months later, a screenshot of a tweet featuring SEC Chairman Gary Gensler surfaced on Twitter, now known as X, originating from the account @XRP_Productions. The tweet depicted an unidentified individual wearing sunglasses and a fedora, peering around a wall behind nominee Gensler. Subsequently, the tweet was manipulated to make it seem as though it had originated from Commissioner Peirce, addressing then-SEC Chairman nominee Gary Gensler regarding the SEC's legal action against Ripple Labs, Inc.

Someone reported the tweet to the inspector general’s office and an investigation was launched. It didn’t take long before agency officials figured out the tweet was a joke and Peirce’s account wasn’t hacked. It was posted by a Twitter account that “self-identifies as a satirical cryptocurrency news site,” according to the inspector general’s report, and whose bio says, “Calm down, folks. It's called s-a-t-i-r-e.”

The negative media attention surrounding the Ripple Labs case stirred turmoil within the SEC. Officials from the inspector general's office engaged with the agency's public affairs office to address the "considerable negative social media sentiment" directed at the SEC regarding its litigation with Ripple. The public affairs office expressed concerns that many of the posts might have originated from automated bots or troll accounts aimed at disrupting the SEC's regulatory agenda and influencing public perception of the Commission.

According to the inspector general's report, an SEC official had "coordinated" with government relations officials at Twitter to explore ways to mitigate bot and troll posts, but a definitive course of action or resolution had not yet been reached.

In a partial legal victory last year, Ripple prevailed against the SEC over the 2020 charges. However, recently, the SEC returned to court and requested a judge to impose a $2 billion fine against the company. The case is currently pending.

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