The SEC has issued a fraud alert to help protect individuals whomay receive lump sum payouts from insurance companies and othersfollowing Hurricane Sandy.

The agency's Office of Investor Education and Advocacy saidhurricanes, floods, oil spills and other disasters often give riseto investmentscams.

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These scams can take many forms, including promoters toutingcompanies purportedly involved in cleanup efforts, trading programsthat falsely guarantee high returns, and Ponzi schemes where newinvestors' money is used to pay money promised to earlierinvestors, the SEC said.

In addition to asking questions such as if the person islicensed and whether the investment they are promoting isregistered with the SEC or with a state, the agency said if a lumppayment is received, the investor should take a close look at theirentire financial situation before making any investmentdecision.

The SEC said it has brought a number of enforcement actionsagainst individuals and companies who made false and misleadingstatements about alleged business opportunities in light of thedamage caused by Hurricane Katrina.

Some of those cases involved pump-and-dump scams wherefraudsters use fake news to pump up the stock price of smallcompanies so they could sell shares they own at artificially highprices, the agency said.

The SEC has a list of online resources to addressinvestment fraud as well recent enforcement action cases.