Investor Alert: Stock Market Fraud "Survivor" Checklist
Investor enthusiasm for the Internet has created tremendous financial opportunities in recent years – for stock market fraudsters! That's because they often use the Internet to lure innocent investors into their scams. But you can survive stock market fraud and avoid becoming a victim if you follow these steps before you invest:
Be Skeptical When you see an offer on the Internet, consider it a scam until you can prove it's legitimate through your own independent research. | |
Consider the Source Remember that the people touting a stock may be company insiders or paid promoters who stand to profit at your expense. | |
Independently Verify Claims Don't rely solely on claims by companies or promoters about new product developments, lucrative contracts, or the company's financial health. | |
Beware of High Pressure Pitches Watch out for promoters who pressure you to buy before you have an opportunity to fully research an offer. | |
Research the Company Always ask for – and carefully read – the company's prospectus and current financial statements. | |
Confirm Registration Check the SEC's EDGAR database or your state securities regulator to make sure the company is properly registered or legally exempt from registration. |
For more information on how to use the Internet to invest wisely and avoid fraud, visit the SEC's Internet and Online Trading www.sec.gov/investor/online.shtml web page.
Last Reviewed or Updated: March 1, 2001