Securities Fraud Lawyers Blog
A Florida stock fraud lawyer is adept at aiding victims of what the U.S. Securities and Exchange Commission (SEC) calls–in its investor alert bulletins–“fraudulent stock promotions.” The SEC’s Office of Education and Advocacy recently issued a warning about “fraudsters who promote a stock to drive up the price, and then sell their own shares at the inflated price.” Therefore, these scam artists profit, but investors lose money. Explains the SEC, “promoters are often paid…or company insiders” who are experts at “creating buying frenzies” of stocks which may actually be worth little.
A Florida stock fraud lawyer–as well as the SEC–know that these charlatans promote stocks
Having compensated third parties to collect the e-mail addresses of wealthy, older investors who reside in certain upscale areas, these fraudsters continue to shell out for “online ads” in the forms of “pop ups” or “banners.” Even though these ads represent scams, their masterminds find ways to troll them across accredited “financial pages of news organizations.”
A Florida stock fraud lawyer would tell you to throw out “high-end glossy mailers” that glorify certain stocks, and that “internet chat rooms” are other sites favored by fraudsters. Through “anonymous” chats, promoters try to convince their prey to “buy stock in microcap companies.” They often claim, “We have the inside track on impending developments” within these organizations.
The SEC warns that microcap stocks are particularly risky for unseasoned investors because they are “issued by the smallest of companies(i.e., penny stocks)” and are, therefore, “more susceptible to price manipulation.” And, there isn’t much public information circulating about these microcaps–which enables fraudsters to spread untruths about them.
The “less liquid”(less quickly sold) the microcap, a Florida stock fraud lawyer will advise you, the easier it is to “manipulate its price.”
- The price–or the “trading volume”–goes up along with the strength of promotions,
- “Press releases” celebrate business contracts/mergers that never reach fruition,
- You research a microcap and discover that it has “little or no assets or revenues,”
- Your microcap “issues a lot of shares,” but the company’s assets don’t increase accordingly,
- Your microcap alters its name–or “type of business” often.
The U.S. Securities and Exchange Commission frequently issues the names of publicly-traded companies which it has ordered to “stop trading.”
If you find the company from which you’ve purchased shares on an SEC suspension list, contact us. We will work diligently to help you recover lost funds.