TMCnet News
FINRA Warns Investors: Don't Fall for Cryptocurrency-Related Stock ScamsThe Financial Industry Regulatory Authority (FINRA) today issued an Investor Alert warning investors to beware of potential stock scams when considering the purchase of shares of companies that tout high returns associated with cryptocurrencies, such as bitcoin. Unrealistic predictions of exponential returns and unsubstantiated claims made through press releases, spam email, telemarketing calls, or posted online or in social media may be signs of a classic "pump and dump" scam. The people touting such deals are typically unlicensed. The goal of the pump-and-dump scam is to inflate the price of the stock through false and misleading statements that create unwarranted demand for the company's shares. The con artists can then sell their shares, leaving investors with worthless stock. Individual stocks are the most commonly held investment among investors nationwide, according to a FINRA Investor Education Foundation survey of 2,000 investors with non-retirement investment accounts. "It can be difficult for investors to avoid the lure of the cryptocurrency markets, especially when prominent people express interest in it, and news reports and social media tout the promise of guaranteed quick fortunes and skyrocketing returns," said Gerri Walsh, FINRA's Senior Vice President for Investor Education. "But it is important to do your research. Even when legitimate companies enter a hot, new sector, con artists almost always follow suit." Before investing in any cryptocurrency-related stock, buyers should follow these tips to avoid costly mistakes:
FINRA is dedicated to investor protection and market integrity. It regulates one critical part of the securities industry - brokerage firms doing business with the public in the United States. FINRA, overseen by the SEC, writes rules, examines for and enforces compliance with FINRA rules and federal securities laws, registers broker-dealer personnel and offers them education and training, and informs the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers a dispute resolution forum for investors and brokerage firms and their registered employees. For more information, visit www.finra.org
View source version on businesswire.com: http://www.businesswire.com/news/home/20171221005916/en/ |