Here's the Next Peril Facing Hurricane Victims

As if floodwater-drenched North Carolina residents didn't have enough to deal with in the wake of Hurricane Matthew, federal regulators have another warning for them: Beware of scam artists who will steal your insurance or relief money.

Between insurance payouts and federal disaster aid, a lot of people in fairly dire financial straits could be getting lump sums of money in the near future, which is like catnip for con artists and scammers. The S.E.C. sent out an investor alert on Wednesday, saying, "These scams can take many forms, including promoters touting companies purportedly involved in cleanup and repair efforts, trading programs that falsely guarantee high returns, and classic Ponzi schemes."

In the aftermath of Hurricane Katrina more than a decade ago, the S.E.C. saw many of these kinds of scams. Some were "pump and dump" schemes to hype the price of a nearly worthless stock by promising would-be investors that the company in question would earn big returns doing cleanup or rebuilding work. Pitched as "business opportunities" to homeowners desperate to stretch their insurance payouts or relief grant monies, the scammers take advantage of the destruction to homes and businesses still fresh in victims' minds.

The S.E.C. said that people getting unsolicited pitches for investments, especially those that come via email, should not let their guard down and should ask plenty of questions.

Start by asking if whoever's pitching the investment "opportunity" is licensed with the S.E.C. and your state's regulator, and if or with whom the investment vehicle is registered. (Any hemming and hawing on what should be basic questions for a legit securities broker should be a giant red flag.) Next, if that hasn't discredited them, ask a bit more about how exactly your money will be invested. If they're promising fast or guaranteed profits at little to no risk to you, run in the other direction, because these are hallmarks of a scammer looking for a mark.