The Autorité des Marchés Financiers (AMF), the stock market regulator in France, warned retail investors in the country against fraudulent offers to buy listed shares at preferential prices on Monday.
AMF said retail investors are generally contacted by e-mail or telephone after leaving their details on internet contact forms.
“These fraudulent offers to buy shares in listed companies, for example, US technology stocks or French stocks that are well known to the general public, are most often based on impersonations of European financial or payment institutions and can be presented in the form of savings accounts,” the market regulator warned.
The independent body said the warning was in response to the large number of reports it had received from retail investors through its AMF Epargne Info Service platform.
AMF in November last year had reported a significant increase in the numbers of retail investors in the country since the start of the pandemic. The financial markets supervisor has examined around 218 million transactions made by French and foreign retail investors in the financial securities under its jurisdiction.
Fake Proposals, Fake Shares
AMF cautioned retail investors against falling victim to fake investment proposals and fraudulent intermediaries that offer to buy shares of the Française des Jeux (FDJ), the operator of France's national lottery games, at an allegedly discounted price.
The body said investors who had contacted it after taking out this type of fraudulent offer reported high losses with an average loss of €55,000.
The regulator pointed out that it had already warned the public in 2019 about fraudulent proposals to buy shares of the FDJ. In December 2021, the watchdog updated its blacklist of websites and entities that provide alternative investments in France without authorisation.
AMF explained: “Retail investors receive investment proposals, for example, in a GAFA savings account with guaranteed capital and indexation on the performance of Google, Amazon, Facebook, Apple shares; or a Tesla, Apple, Facebook savings account; diversified savings accounts based on shares of companies that are sometimes not even listed; fake share purchase contracts or high-frequency trading savings accounts.”
Therefore, the regulator called for “the utmost vigilance with regard to offers to invest in the securities of listed large companies, whether foreign or French, at a price below their official price, by unauthorized actors or those impersonating regulated entities.”
The body added: “The AMF reminds retail investors that investment advice and the subscription of shares on behalf of clients are regulated activities. Only authorized investment services providers listed on the Regafi register or intermediaries authorized in the category of financial investment advisors (FIAs), FIAs registered with ORIAS, are qualified to carry out these activities.”
“The AMF recommends that investors should not respond to solicitations from persons who ask them to invest without checking that these persons have the necessary guarantees or authorizations.”
Moreover, the financial instruments watchdog reminded investors to be vigilant by being wary of promises of quick profits without trade-offs.
Among other vigilant measures, the AMF advised investors not to give their personal information, phone numbers, email address, ID documents, bank details, International Bank Account Number, proof of residence, etc., to unreliable websites.
