The allegations against pig butchering scams are extremely serious, with victims potentially losing over $75 billion according to a recent study covered by Time magazine. As a financial analyst and legal expert, I find these cases deeply concerning and believe it’s crucial for investors to understand the risks and their potential recovery options.
In a typical pig butchering scam, perpetrators build trust with victims over time through social media, dating apps, or messaging platforms. As the Federal Deposit Insurance Corporation explains, this process of “fattening” the victim before eventually stealing their money is where the scam gets its disturbing name. Once trust is established, the scammer convinces the victim to invest increasing amounts of money through cryptocurrency exchanges like Coinbase or fraudulent platforms the perpetrator controls. When the scam concludes, the victim’s money vanishes along with the scammer.
Fact: According to a study by the University of Chicago, roughly 7% of financial advisors have a history of misconduct, such as providing unsuitable investment advice or misappropriating client funds.
Red flags investors should watch for
The Financial Industry Regulatory Authority (FINRA) published an alert in 2022 outlining common signs of pig butchering scams that investors should be wary of:
- Unexpected messages from unknown contacts, even about seemingly innocent topics
- Romance scammers who refuse to video chat or meet in person, likely to conceal their real identity
- Requests for financial information from someone you’ve never met
- Unsolicited investment advice or opportunities, especially when pressured based on personal details the scammer has learned
- Instructions to send money to unfamiliar platforms or cryptocurrencies without clear information about security, backing, or fund withdrawal processes
- Claims that seem too good to be true, like guaranteed returns, along with emotional appeals referencing things like your family’s financial needs
Background on pig butchering perpetrators
While pig butchering scams are often conducted by lone individuals without financial credentials, in some cases the perpetrators are affiliated with fraudulent investment groups operating across borders. Victims may be misled to believe they are investing with a legitimate firm. However, the FINRA BrokerCheck is a valuable resource to verify the license and background of any financial advisor, including complaints against them, before investing.
As an expert on financial regulations, I believe greater regulatory oversight and aggressive legal action are needed to combat these scams and hold perpetrators accountable. In 2021, FINRA issued a regulatory notice warning members about an uptick in pig butchering cases. Yet meaningful enforcement has been limited as scammers exploit cryptocurrencies and overseas shell companies to obscure their tracks.
Fact: An estimated one in five romance scam victims lose money to fraud, with a median individual loss of $2,400 according to the Federal Trade Commission.
Taking legal action to recover losses
For pig butchering victims, the path to recovering lost funds is complex but worth pursuing with the guidance of an experienced financial fraud attorney. Legal strategies may include filing claims against any licensed financial institutions the scammer exploited, or using court orders to trace and seize stolen assets.
As a society, we must also support stronger regulations to prevent these scams and provide restitution for victims. I encourage readers to contact their representatives in Congress and urge them to expand the resources and authority of agencies like the Commodity Futures Trading Commission and Securities and Exchange Commission to combat this fraud.
In the eloquent words of famed financier Warren Buffett, “Risk comes from not knowing what you’re doing.” The more informed investors are about pig butchering tactics, the better we can collectively root out these scams and protect hard-earned money.
If you believe you’ve been the victim of a pig butchering scam, you can contact Haselkorn & Thibaut for a free and confidential consultation to discuss your recovery options. There may be avenues to pursue your case without upfront legal costs, so don’t hesitate to seek expert guidance. Together, we can work to hold these scammers accountable and secure some measure of justice for those harmed by their destructive greed.
