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Thursday, July 11, 2013

Beware of Stock Email Scams

The Securities and Exchange Commission and the Financial Industry Regulatory Authority (FINRA) recently issued a warning to investors about a sharp increase in emails linked to "pump-and-dump" stock schemes. These scams are also showing up on Facebook, Twitter, and chat rooms.

A pump-and-dump scheme is a scam that attempts to boost the price of a stock through recommendations based on false or greatly exaggerated statements

Pump-and-dump promoters frequently claim to have "inside" information about an impending development. Others may say they use an "infallible" system that uses a combination of economic and stock market data to pick stocks. 

These scams are the inbox equivalent of a boiler room sales operation, hounding investors with potentially false information about a company.

The investor alert covers how these scams and work and what you can do to protect yourself.