Excerpted from SEC.gov:

Investor Alert: Beware of False or Exaggerated Credentials

 06/03/2015

The SEC’s Office of Investor Education and Advocacy (OIEA) is issuing this Investor Alert to warn investors that fraudsters may misrepresent their backgrounds and experience to lure investors into investment schemes.  Before investing, investors should verify that any person who tries to sell them an investment product or service is properly licensed or registered and should not make investment decisions based solely on assertions regarding the person’s credentials or professional experience, including claims found on the Internet or in traditional media sources.In order to attract unsuspecting investors and gain their trust, fraudsters may boast about credentials they do not have.  They may fabricate, exaggerate, or hide facts about their backgrounds to portray themselves as successful professionals and to make you believe that the investments they offer are legitimate.  Others may repeat these misrepresentations and contribute – perhaps unintentionally – to a fraudster’s false reputation of success and professional accomplishment.  Do not trust someone with your investment money just because he or she claims to have impressive credentials or experience, or manages to create a “buzz of success” around himself or herself.Look out for unlicensed or unregistered sellers.  Many fraudulent investment schemes involve persons who are not licensed or registered.  Use the SEC’s Investment Adviser Public Disclosure (IAPD) website and the Financial Industry Regulatory Authority (FINRA)’s BrokerCheck website to determine whether a person recommending or selling an investment is licensed or registered and if so, to check out the person’s background including any disciplinary history.  Contact your state securities regulator to see whether the person is licensed with your state securities regulator to do business with you.Fraudsters may misrepresent their education.  In SEC v. Colangelo, the defendant allegedly defrauded investors, and made misrepresentations regarding the investments he offered as well as his professional and educational background.  The SEC alleges that the defendant emailed potential and existing investors a link to his LinkedIn profile in which he represented that he had studied finance at Nyack College when he never attended Nyack College and had not even graduated from high school.  In SEC v. Hicks, the SEC alleges that the defendant falsely represented in the offering memorandum for a fictitious hedge fund that he had earned undergraduate and graduate degrees from Harvard University when he had only enrolled there for a few semesters.Fraudsters may lie about having been awarded honors that they have not received or that do not even exist.  In In the Matter of Michael G. Thomas, the respondent allegedly solicited investors for a private fund by misrepresenting that he was named a “Top 25 Rising Business Star” by Fortune Magazine when no such distinction exists.  To gain credibility, he also allegedly lied to potential investors about the persons who would be associated with his fund, the profitability of his past investments, and the expected profitability of the fund’s proposed investment.Fraudsters may pretend to hold certain professional titles to suggest that they have certain expertise or qualifications.  In SEC v. Nickles, the defendant allegedly solicited investors through advertisements in prominent newspapers.  The SEC alleges that he falsely promised that the investments he offered were insured or U.S. Government guaranteed, and he held himself out as a certified financial planner (CFP) when he had no such credentials or certification.  The website of the Certified Financial Planner Board of Standards allows visitors to search for CFP professionals to verify CFP certification.  For more information regarding professional titles used by financial professionals, read our Investor Bulletin, Making Sense of Financial Professional Titles.Fraudsters may appear as a guest commentator on financial television shows.  In In the Matter of Todd M. Schoenberger, the respondent allegedly made misrepresentations in soliciting investors to invest in short-term promissory notes and used the majority of money he received from investors for his own personal expenses.  The respondent allegedly touted his appearances as an investment and stock market commentator on television business news programs in soliciting investors.  He also allegedly gave prospective investors marketing materials stating that he had received a degree from the University of Maryland (when he had not) and that he previously worked for a broker-dealer registered with the SEC (without disclosing that the broker-dealer terminated him for misuse of company assets).Fraudsters may use traditional media sources, the Internet, or social media to develop a public profile that gives them a false air of legitimacy.  In In the Matter of Keiko Kawamura, the respondent allegedly conducted an investment scheme involving a self-described hedge fund and another scheme involving a subscription service for investment advice, fraudulently using investors’ money for her own living expenses and luxury trips.  The respondent allegedly posed as an investment banker with nearly 10 years of experience and solicited investors through Twitter, Facebook, and other social media.Fraudsters may pretend that they have a certain position or title at a company.  In SEC v Homepals, the SEC alleges that the defendants sold unsecured notes as part of a Ponzi scheme.  When meeting with prospective and actual investors, two of the defendants allegedly misrepresented that they were the company’s secretary and the company’s attorney when they never held any official positions at the company.Fraudsters may inflate their professional experience.  In SEC v. Helms, the defendants allegedly raised nearly $18 million for supposed purchases of oil-and-gas royalty interests through a company they controlled and used most of investors’ money to make Ponzi payments and to cover various personal and business expenses.  The defendants allegedly misled investors about the defendants’ experience in the oil and gas industry.  As another example, in SEC v. Della Penna, the defendant allegedly misrepresented his trading track record as a private fund manager and then lost almost all of investors’ money by making unsuccessful investments, paying his own personal expenses, and using later investors’ money to pay fake “returns” to prior investors.As you can see from these examples, you cannot believe everything you hear about a person’s educational and professional background.  Ask for details and be particularly skeptical if you do not receive direct and specific answers to your questions.  Be cautious if you encounter discrepancies regarding someone’s background such as conflicting information or dates that do not add up.  Independently verify claims with reliable sources, including IAPD, BrokerCheck, and state securities regulators.  If someone falsely depicts his or her background and tries to sell you an investment, do not trade with the person, do not give the person any money, and do not share your personal information with the person.  Submit a complaint and report the misrepresentations to the SEC.