Look Who's Scamming You Now
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The Internet has always been a haven for phony stock touters and financial scamsters, but it's not every day that investors have to be wary of hoaxes staged by the Securities and Exchange Commission.
And yet that's exactly what happened as the federal securities watchdog admitted to setting up an online "scam" involving a fictitious company called McWhortle Enterprises Inc. that purportedly markets a handheld biohazard detector "guaranteed to beep and flash in the presence of anthrax or other deadly germs."
There's no such product, and no such company, and the SEC said the whole thing was an effort to warn consumers about the risks of online investing.
The McWhortle Web site was still up in early afternoon, complete with a picture of the fake device and text that claims the thing "works by detecting microscopic levels of hazardous bio-organisms."
The SEC had some lofty company in this consumer education effort. The site says that McWhortle "is a complete fabrication, posted by the Securities and Exchange Commission, the Federal Trade Commission, the North American Securities Administrators Association, and the National Association of Securities Dealers to alert investors to potential online frauds."
Even PR Newswire helped by distributing a fictitious news release to Web sites and online databases. PR Newswire Americas President David Armon said that the McWhortle site received 120,000 hits in the first two days after the SEC issued the release on Jan. 25.
The SEC also said there are at least two other such fake Web sites out there.
Officials from the SEC and the other agencies involved were quoted as saying they had no ethical problems with using a hoax to educate consumers. "In a perfect world, everyone would read our educational brochures before they ran into a scam, but they don't," SEC Chairman Harvey Pitt said in a government press statement describing the effort.
Since the recent anthrax-by-mail scare, the FTC says it has warned more than 100 Web site operators to stop making unproven claims about devices for bioterrorism protection.