Investment Newsletter Fraud

The U.S. Securities and Exchange Commission’s (“SEC”) Office of Investor Education and Advocacy recently released Investor Alert: Investment Newsletters Used as Tool for Fraud to assist investors in avoiding cleverly disguised schemes in investment newsletters.

Promoting stocks without disclosing compensations received, also known as “touting” and recommending stocks to drive up the price and selling shares at an inflated prices, also known as "scalping," are just a few of the schemes that were recently discovered in investor newsletter communications.

Of particular note, investors should be skeptical of newsletters that have buried disclosures, which may be difficult to locate or appear in “tiny, hard-to-read print” as well as vague disclosures that do not offer much detail or that lack disclosures all together.

In some cases, newsletter publications are used as gateway portals for schemers to acquire investor information and make contact by phone to offer specific recommendations.  If it sounds too good to be true, it probably is.

While many investment newsletters are excellent sources filled with useful information, it is important for investors to conduct thorough and further research before making any investment.

For more information on this and other related subjects, please contact us at info@corecls.com or (619) 278-0020.

GENERAL DISCLAIMER: Information contained within this blog does not create a business-client relationship, and none of the content of this blog can be deemed to be consultive business advice.