Avoiding Fraudulent Schemes Carried Out through Investment Newsletters
In a recently published alert, the U.S. Security and Exchange Commission (SEC) provides useful guidance to help investors avoid fraudulent schemes based upon investment newsletters. It’s a common problem, with investors often getting enticing information through online or hard copy newsletters. The alert points out that, though many investment newsletters are legitimate, some have been found to deceive investors. The SEC alert lists a number of things to watch out for, including: • Touting – This is when a newsletter promotes a stock without properly disclosing compensation received for the promotion. • "Pump and dump" schemes – This involves pumping…