The Securities and Exchange Commission issued an alert back in January urging investors to use caution when using social media to research an investment. While social media websites, such as Facebook and Twitter, can provide many benefits for investors, they also present many opportunities for fraudsters.
Social media and the Internet generally, offer a number of attributes criminals may find attractive. Social media lets fraudsters contact many different people at a relatively low cost. It is also easy to create a site, account, email, direct message, or webpage that looks and feels legitimate – and that feeling of legitimacy gives criminals a better chance to convince you to send them your money. Finally, it can be difficult to track down the true account holders that use social media. That potential for anonymity can make it harder for fraudsters to be held accountable. As a result, investors need to use caution when using social media when considering an investment.
For more information on how to protect yourself, view the alert from the Securities and Exchange Commission at http://investor.gov/news-alerts/investor-alerts/investor-alert-social-media-investing-avoiding-fraud .