Beware Of Stock Fraud In The Wake Of Natural Disasters
North American Precis Syndicate
Stop and think before you invest in disaster-related financial opportunities. It could be a disaster for you. (NAPS)
(NAPSI)—Financial fraud routinely follows on the heels of natural
disasters like hurricanes, wildfires and earthquakes—but you don't have to be
a victim. After a disaster, you may receive unsolicited phone calls, e-mails
and texts, including from messaging apps, about investments that exploit a
variety of disaster-related opportunities.
Best bets for scams include stock or crowdfunding investments associated
with cleanup, rebuilding, and breakthroughs in science and technology that
purport to address current and future issues related to the disaster. While
it is conceivable that some of the claims are true, many could turn out to be
bogus—or even scams.
Unsolicited communications about investments that exploit natural
disasters frequently include price targets or predictions of swift and
exponential growth and might even cite respected news sources to bolster
those claims. They might also claim the company has contracts with government
agencies or well-known companies. More than anything, these pitches include
pressure to invest immediately, suggesting "You must act now!"
How To Avoid Getting Scammed
To avoid potential scams, make sure you get the information you need to
make a wise investment choice.
1. Before you invest, ask and
check. Never rely solely on information from an unsolicited e-mail, text
message or cold call from an "analyst" or "account executive" promoting a
stock. It's easy for companies or their promoters to make glorified claims
about new products, lucrative contracts, or the company's revenue, profits or
future stock price. Ask questions about the investment and use FINRA
BrokerCheck at BrokerCheck.FINRA.org
to check registration status and other information on investment
professionals and firms.
2. Find out who sent the message.
Many companies and individuals who tout stock are corporate insiders or paid
stock promoters. Look for statements (usually found in the fine print) that
indicate cash payments or the receipt of stock for disseminating a report on
3. Find out where the stock trades.
Most unsolicited stock recommendations involve stocks that can't meet the
listing requirements of The Nasdaq Stock Market, The New York Stock Exchange
or other U.S.
stock exchanges. Instead, these stocks tend to be quoted on an
over-the-counter (OTC) quotation platform.
Companies that list their stocks on registered exchanges must meet minimum
listing standards. For example, they must have minimum amounts of net assets
and minimum numbers of shareholders. In contrast, companies quoted on the
OTCBB or OTC Link generally do not have to meet any minimum listing standards
(although companies quoted on the OTCBB, OTC Link's OTCQX and OTCQB marketplaces
are subject to some initial and ongoing requirements).
4. Read a company's SEC filings.
Most public companies file reports with the SEC. Check the SEC's EDGAR
database at www.SEC.gov/EDGAR to find
out whether the company files with the SEC. Read the reports and verify any
information you have heard about the company. But remember, the mere fact
that a company has registered its securities or has filed reports with the
SEC doesn't mean the company will be a good investment.
If you're suspicious about an offer or if you think the claims might be
exaggerated or misleading, you can contact FINRA at www.FINRA.org/Investors/File-Complaint.
To learn more about how to protect your money, visit the FINRA
Foundation's website: www.SaveandInvest.org.
On the Net:North American Precis Syndicate, Inc.(NAPSI)