SEC and FINRA Warn About Spam Pump-and-Dump Email Fraud Schemes
Jun 12th 2013 1:50PM
Do you ever get spam emails touting "public" companies on an unsolicited basis? If your email address appears anywhere online, chances are high that you have been sent a spam email that was not solicited and likely not permissioned by you. Now the SEC and FINRA (Securities and Exchange Commission and the Financial Industry Regulatory Authority) are issuing a joint warning directed toward investors about a sharp rise in e-mails linked to "pump-and-dump" stock schemes.
Today's alert is even titled "Don't Trade on Pump-And-Dump Stock E-mails" and it suggests that the latest McAfee Threats Report confirms a steep rise in spam e-mail traffic that is linked to bogus "pump-and-dump" stocks. It warns that these schemes are designed to trick unsuspecting investors.
To add yet another "pump and dump" fear out there, the SEC/FINRA alert also says that false claims could also be made on bulletin boards, chat rooms, Facebook, Twitter and elsewhere. The SEC suggests simply hitting the delete button for these unsolicited emails. A combined statement from SEC/FINRA officials said,
"Investors should always be wary of unsolicited investment offers in the form of an e-mail from a stranger. The best response to investment spam is to hit delete… Spam e-mail is the bait used to lure people into making bad investment decisions. No one should ever make an investment based on the advice of an unsolicited email."
Another warning is that these promoters often claim inside information about an impending development. Others tout trading systems using a combination of economic and stock market data to pick stocks. Today's alert equates these to boiler room sales operations and the word "fraud" appears multiple times.
You get the idea, hopefully.
FULL SEC/FINRA WARNING
Filed under: 24/7 Wall St. Wire, Active Trader, Activist Investor, Corporate Governance, Micro Cap, Regulation, SEC