scams-e1427468511623When you read an article on an investment research website, be aware that the article may not be objective and independent.  For example, the writer may have been paid directly or indirectly by a company to promote that company’s stock.  In some cases, the writer may not disclose compensation received or may go so far as to claim falsely that compensation was not received.  Keep in mind that fraudsters may generate articles promoting a company’s stock to drive up the stock price and to profit at your expense.

Stock promotion schemes also may be conducted through social mediainvestment newsletters, online advertisements, email, Internet chat rooms, direct mail, newspapers, magazines, television, and radio.  Be wary if you receive communications (including new posts, tweets, text messages, or emails) promoting a stock from someone you do not know, even if the sender appears connected to someone you know.  If a company’s stock is promoted more heavily than its products or services, this may be a red flag of investment fraud.

Microcap stocks, some of which are penny stocks and/or nanocap stocks, may be particularly susceptible to stock promotion schemes and other forms of market manipulation.

Even if articles on an investment research website appear to be an unbiased source of information or provide commentary on multiple stocks, they may be part of an undisclosed paid stock promotion.  Never make an investment based solely on information published on an investment research website.  Before investing in a particular stock, research the company thoroughly and make sure you understand its business.  As with any investment decision, carefully review all of the materials available to you and if possible, verify what you are told about the investment.

Source:  Securities & Exchange Commission