It seems that mosquitoes aren’t the only thing people will have to watch out for on the Zika front. As with any public crisis, the outbreak of the Zika virus has come with the threat of investment fraud in tow. Crooks and scam artists exploit crises like this one by preying on public anxieties. This sort of behavior is not only detrimental to victims of investment scams, but also further clouds public perception of a crisis by circulating false information.
As such, the Securities and Exchange Commission (SEC) has issued an Investor Alert in an effort to prevent anyone falling victim to financial fraud. The SEC’s investor alert covers several tips and warning signs to know if you may be getting involved in an investment scam.
- Unregistered investment professionals
- Visit investor.gov to check registration status of any firm or individual recommending or selling an investment
- High returns, little to no risk
- No investment is without risk. If it sounds to good to be true, it probably is.
- Unsolicited offers
- Whatever social media platform or mode of communication used, do not respond to any investment opportunities directed at you if the sender is not recognized. Be especially careful of offers claiming “inside” or “confidential” investment information.
- “Pump-and-dump” Scams
- These scams pump up stock prices based on falsified rumors about product effectiveness, inciting buying-frenzy, and then shares are quickly dumped before hype fades. Microcap and penny stocks are especially susceptible. Little trading information is publicly available on microcap companies making it easing to falsify information.
- Trading suspensions
- Find out if the SEC has suspended trade of a company’s stock here
- Investment research
- As with any investment opportunity, investors should thoroughly research a company before acting. Avoid investment fraud by checking with the SEC for updates and resources or consult an investment attorney to find out more before deciding to invest.