| | |  Business News 
Gulf of Mexico Oil Spill Stokes Potential Financial Scams
 Press Trust of India
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May 29, 2010
| | While some of the companies touting their role in the cleanup may be legitimate, others could be bogus operations that are only looking to clean out unsuspecting investors. | |
It is billed as one of the worst oil disasters and now, the Mexican Gulf oil spill is posing a threat to investors, with fraudsters promising financial gains from entities that claim to be involved in the clean up act.
US regulators have warned investors against potential scams that exploit the Gulf oil spill and related clean up efforts.
"While some of the companies touting their role in the cleanup may be legitimate, others could be bogus operations that are only looking to clean out unsuspecting investors," market regulator Securities and Exchange Commission said in a statement yesterday.
The spill was caused by an explosion on the Deepwater Horizon rig in April and going by estimates, as much as 12,000 barrels of oil is leaking into the Gulf of Mexico everyday.
The SEC and Financial Industry Regulatory Authority (FINRA) have cautioned of a financial threat to investors in the form of scams promising financial gains from investments in companies that claim to be involved in cleanup operations.
Millions of dollars are being spent daily on short-term clean up of the spill, but the total estimated cost of long-term remediation remains unknown, given the uncertainty about the extent of damage to the environment, the fishing industry and tourism.
Earlier this week, SEC had suspended share trading of California-based ACT Clean Technologies amid claims that one of the company's technologies could be effective in clean-up efforts in the Gulf of Mexico.
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