Investor Corner

Welcome to the Investor Corner of the European Securities and Markets Authority (ESMA). ESMA cannot tell you what investments to make, but we can help you to make a better-informed investment decision and avoid fraud and have created this corner to address frequent questions and issues that retail investors have often encountered.

What does ESMA do for Investors?

The European Security and Markets Authority (ESMA) plays an important role in enhancing the protection of investors in the European Union (EU).

As an independent European Supervisory Authority (ESA), ESMA:

  • analyses risks to investors;
  • writes rules to improve investor protection in financial markets across the EU;
  • works in cooperation with the national competent authorities (NCAs) of all EU member states to develop tools and measures these NCAs can use to tackle and solve investor protection issues;
  • can temporarily restrict or prohibit the marketing, distribution or sale of financial products;
  • can develop training standards for the industry; and
  • works with NCAs on educating investors.

Additionally, ESMA cooperates closely with the other European Supervisory Authorities (ESAs) – the European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) – in:

  • analysing and tackling risks to investors related to investment, banking and insurance products; and
  • writing rules to improve investor protection across the investment, banking and insurance sectors in the EU.
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To help you with your practical questions and problems, ESMA’s Investor Corner contains:

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What ESMA cannot do for Investors

As a publicly financed authority, ESMA’s activities to enhance investor protection depend on its legal mandate set out in ESMA’s founding Regulation and its limited staff and budgetary resources. Consequently, ESMA can unfortunately not help you with the following:

  • ESMA cannot provide you with legal advice, for example, on a problem you may have with an investment firm. In such a case we would suggest that you seek legal advice from a consumer organisation or a lawyer.
  • ESMA is not competent to deal with matters relating to a dispute you may have with an investment firm. Depending on what the dispute is about, the NCA that supervises this firm or the ombudsman in charge of financial service matters in your country (as relevant) could instead be able to help you.
  • ESMA does not directly supervise investment firms, this is instead the responsibility of the NCAs.
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Frauds and scams

Frauds and scams can be addressed to you in many different ways. The information placed on this webpage is not complete and thus does not cover all practices of fraudsters and scammers. For frauds and scams related to ESMA logo and ID, refer to the dedicated webpage.

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How can I protect myself from being scammed?

Guard your information

Be aware before sharing. Be careful not to share personal or financial details such as usernames, passwords, bank details, or investment information.

Avoid unknown links

Do not click on links or open emails from unknown senders.

Be sceptical of unexpected offers

If contacted unexpectedly by phone or email about an investment opportunity, be cautious. Fraudsters often seek to establish unsolicited contact to target potential victims. In such cases:

  • Delete the email.
  • Hang up the phone.
  • Firmly say "no" and repeat, if necessary.
  • End the conversation if pressure rises, using an excuse like needing to attend to an urgent matter.
Beware of deepfake videos

Fraudulent schemes may use deepfake videos. Look for unnatural movements or poor audio quality. Report suspicious videos to the hosting platform.

Be sceptical of unrealistic profit claims

Be wary of platforms claiming to use AI for guaranteed profits, as these may be scams.

Spot fraudulent pyramid schemes

If you are asked to recruit others into an investment scheme with promises of payment, it might be a fraudulent Pyramid or Ponzi scheme.

Seek regulated advice

Ensure investment firms are regulated referring how to find out if a firm is regulated in ESMA’s Investor Corner.

Trade on regulated platforms

Verify that the exchange or trading platform is listed in ESMA’s register.

Check website URLs

Look for odd spellings in URLs (for example, the number 1, or another number, being added after the investment firm’s name “nameoftheinvestmentfirm1.com”), which might indicate a fraudulent site mimicking a legitimate firm.

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What does a scam look like?

  • Contact through multiple communication channels: Scammers aim to mislead you and obtain your money or personal data. To achieve this, they may contact you through various channels, including email, phone calls, SMS, and social media platforms. Initially, these messages might seem too good to be true or might come unexpected.
  • Pressure to act quickly: Fraudsters often create a sense of urgency, pushing you to make quick decisions. If you feel rushed, be cautious.
  • Unrealistic promises: Scammers often take advantage of the excitement around AI by making exaggerated claims, such as guaranteeing that their AI trading system will never lose. Be wary of such promises.
  • Deepfake videos: Advances in AI technology allow fraudsters to create convincing fake videos, known as deepfakes. These videos may show well-known finance experts endorsing fraudulent AI investment products.
  • Stock manipulation: Some scammers spread false information about a company's AI-related products or services to manipulate stock prices. They buy shares at a low price, then use fake advertisements, news, or social media to inflate the stock's value. Once the price rises, they sell their shares, causing the stock to plummet and leaving other investors with significant losses.
  • Too-good-to-be-true offers: Offers that include discounts, bonuses, or claims of a unique opportunity are often tactics used by scammers. Such offers are designed to create a sense of urgency and to lure into quick investments.
  • Fake websites: To appear credible, scammers may create fake websites that mimic authorised investment firms. These sites can be used to steal your personal information and money. 
  • Personal information requests: Scammers might ask for personal information claiming to facilitate money transfers or your payments of administrative fees.
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What can I do as a victim?

  • Make sure you are aware of your rights as a victim of a crime by using the European e-Justice Portal
  • If you have already been in contact with the fraudsters, stop all interactions. 

As a next step, please consider the following:

  1. Report your case to local law enforcement authorities, such as the police.  
  2. Inform your National Competent Authority (NCA).
  3. The IOSCO Investor Alerts Portal can be searched if you are suspecting a scam or other illegal investment activities. Potential investors should however not assume, in the absence of a relevant warning on the IOSCO Investor Alerts Portal, that companies who approach them offering investment services are authorised or legitimate. Rather, you should always check with your domestic regulator whether a company is authorised to provide investment services
  4. Reach out to your financial services consumer organisations.
  5. Make sure you are aware of your rights as a victim of a crime by using the European e-Justice Portal.
  6. Approach a lawyer to consider taking legal action against the firm.
  • ESMA is not able to deal with investment fraud cases. Unfortunately, we cannot assist you in your matter. 
  • However, in case of doubts or suspicions about the authenticity of any correspondence received that claiming to be from or linked to ESMA or its representatives, you can reach us by e-mail: scamreport@esma.europa.eu
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