A group of unidentified scammers duped victims out of "at least hundreds of thousands of dollars" by posing as WisdomTree executives and falsely claiming to have hosted a conference with Fidelity and other top investment firms, the asset manager contends in a lawsuit filed Thursday.
WisdomTree alleges the complaint in U.S. District Court for the Southern District of New York is necessary to stop the 10 "John Doe" defendants "from defrauding customers out of substantial sums of money. Defendants are engaged in a dangerous and predatory scheme to extract their victims’ personal information and dupe victims into depositing money into fraudulent investment platforms."
More than 1,000 victims have been scammed via dozens of fraudulent WhatsApp groups, WisdomTree alleges.
To accomplish their scam, the fraudsters are "fraudulently impersonating" WisdomTree and employees and misappropriating WisdomTree’s trademarks, the lawsuit contends, noting the defendants used the WhatsApp platform to promote their scheme and trick victims into downloading and engaging with fraudulent investment apps.
"To avoid detection or responsibility for the consequences of their scheme, Defendants concealed their identities. Because their plot trades on WisdomTree’s reputation and integrity, WisdomTree needs immediate discovery, injunctive relief, and damages to prevent Defendants from defrauding any other victims of the scheme," the complaint contends.
The scammers created multiple messaging groups on Meta-owned messaging platform WhatsApp and used WisdomTree marks and identity in group titles and images, the complaint says. They induced their victims to download or sign up for the deceptive smartphone apps and web platforms and input their banking information to invest in digital assets, such as cryptocurrencies, and receive "free money" for trading on the phony platforms, the lawsuits says.
"Defendants intentionally misrepresent themselves as authorized representatives of WisdomTree in a ploy to defraud — or worse — potential investors. Defendants solicit disclosure of personal information from victims and convince victims to contribute money into the Fraudulent Investment Platforms," the suit contends.
To engender a false sense of legitimacy, the fraudsters "circulate, via WhatsApp, photographs and videos depicting a group of fake WisdomTree executives" and falsely claim they hosted a conference with Fidelity, Goldman Sachs, BlackRock and Vanguard, the complaint alleges. "The conference never occurred and none of the referenced financial institutions endorsed it," it adds.
WisdomTree said it received complaints from consumers who were cheated when they relied on the scammers' "malicious misrepresentations," and cited willful trademark infringement, fraudulent conduct and false representations.
After WisdomTree worked with Apple Inc. to disable the initial deceptive smartphone application called “WisdomTree Pro” in August last year, the scammers created another smartphone application called “WT AUS” misappropriating WisdomTree’s identity and marks, the complaint contends.
"Unless Defendants are restrained by this Court, Defendants will continue expanding their illegal activities and otherwise continue to cause irreparable damage and injury to WisdomTree — and to the recipients of the fraudulent messages, who believe they are dealing with WisdomTree," the suit argues.
"WisdomTree takes these matters seriously and is pursuing these actions to protect investors and in alignment with its commitment to providing access, transparency, and an enhanced user experience to investors through its products,” a company spokesperson told ThinkAdvisor.
CityWire reported on the lawsuit earlier Friday.
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