Skip to Main Content

			U.S. Securities andExchange Commission		

Company Filings | More Search Options

                  -  About                      -  What We Do 
                    -  Commissioners 
                    -  Securities Laws 
                    -  SEC Docket 
                    -  Reports and Publications 
                    -  Careers 
                    -  Contact 
                  -  Divisions                      -  Corporation Finance 
                    -  Enforcement 
                    -  Investment Management 
                    -  Economic and Risk Analysis 
                    -  Trading and Markets 
                    -  National Exam Program 
                    -  All Divisions and Offices 
                  -  Enforcement                      -  Litigation Releases 
                    -  Administrative Proceedings 
                    -  Opinions and Adjudicatory Orders 
                    -  Accounting and Auditing 
                    -  Trading Suspensions 
                    -  How Investigations Work 
                    -  Administrative Law Judges 
                  -  Regulation                      -  Rulemaking Index 
                    -  Proposed Rules 
                    -  Final Rules 
                    -  Interim Final Rules 
                    -  Other Orders and Notices 
                    -  Self-Regulatory Organizations 
                    -  Staff Interpretations 
                  -  Education                      -  Investor.gov 
                    -  Check Out a Broker or Adviser 
                    -  Investor Alerts and Bulletins 
                    -  Fast Answers 
                    -  File a Tip or Complaint 
                    -  Publications 
                  -  Filings                      -  EDGAR Search Tools 
                    -  Company Filings Search 
                    -  How to Search EDGAR 
                    -  Requesting Public Documents 
                    -  Forms List 
                    -  Information for Filers 
                    -  About EDGAR 
                  -  News                      -  Press Releases 
                    -  Public Statements 
                    -  Speeches 
                    -  Testimony 
                    -  Spotlight Topics 
                    -  What's New 
                    -  Events 
                    -  Webcasts 

# Investor Publications

                - 				Investor Information			                   - 								Investor Alerts and Bulletins							
                  - 								Fast Answers							
                  - 								Investor Reports/Publications							
                  - 								Tools and Calculators							
                  - 								Education Resources							
                  - 								Información en Español							
                  - 								Contact

Investor Publications

----

# Internet Fraud

TheInternet is a useful way to reach a mass audience without spending a lot oftime or money.  A website, online message, or “spam” e-mails can reach largenumbers with minimum effort.  It's easy for fraudsters to make their messageslook real and credible and sometimes hard for investors to tell the differencebetween fact and fiction.  That's why you should think twice before you investyour money in any opportunity you find online.

Here are some of the ways investors can be tricked online:

## Online Investment Newsletters

While legitimate online newsletters may contain valuable information, others are toolsfor fraud.

Some companies pay online newsletters to "tout" or recommend theirstocks.  Touting isn’t illegal as long as the newsletters disclose who paidthem, how much they’re getting paid, and the form of the payment, usually cashor stock.  But fraudsters often lie about the payments they receive and theirtrack records in recommending stocks. 

Fraudulent promoters may claim to offer independent, unbiased recommendations innewsletters when they stand to profit from convincing others to buy or sellcertain stocks.  They may spread false information to promote worthlessstocks.  To learn more, read our tipsfor checking out newsletters.

## Online Bulletin Boards

Online bulletin boards are a way for investors to share information.  While somemessages may be true, many turn out to be bogus – or even scams.  Fraudstersmay use online discussions to pump up a company or pretend to reveal"inside" information about upcoming announcements, new products, orlucrative contracts.

You may never know for certain who you're dealing with, or whether they're credible,because many sites allow users to hide their identity behind multiple aliases.  Peopleclaiming to be unbiased observers may actually be insiders, large shareholders,or paid promoters.  One person can easily create the illusion of widespreadinterest in a small, thinly traded stock by posting numerous messages undervarious aliases.

## Pump and Dump Schemes

"Pump and dump" schemes have two parts.  In the first, promoters try to boostthe price of a stock with false or misleading statements about the company. Once the stock price has been pumped up, fraudsters move on to the second part,where they seek to profit by selling their own holdings of the stock, dumpingshares into the market.

These schemes often occur on the Internet where it is common to see messages urgingreaders to buy a stock quickly.  Often, the promoters will claim to have"inside" information about a development that will be positive forthe stock.  After these fraudsters dump their shares and stop hyping the stock,the price typically falls, and investors lose their money.

Pump and dump schemes typically involve little-known microcap companies.  For more information, read Microcap Stock: A Guide for Investors.

## Spam

“Spam" – junk e-mail – often is used to promote bogus investment schemes or to spreadfalse information about a company.  With a bulk e-mail program, spammers cansend personalized messages to millions of people at once for much less than thecost of cold calling or traditional mail.  Many scams, including advance feefrauds, use spam to reach potential victims.

To learn how to protectyourself online and other tips for investing wisely, visit www.investor.gov.

 

 

STAY CONNECTEDTwitterFacebookRSSYouTubeFlickrLinkedInPinterestEmail Updates

                  -  Site Map 
                  -  Accessibility 
                  -  Contracts 
                  -  Privacy 
                  -  Inspector General 
                  -  Agency Financial Report 
                  -  Budget & Performance 
                  -  Careers 
                  -  Contact 
                  -  FOIA 
                  -  No FEAR Act & EEO Data 
                  -  Whistleblower Protection 
                  -  Votes 
                  -  Open Government 
                  -  Plain Writing 
                  -  Links 
                  -  Investor.gov 
                  -  USA.gov 

U.S. Securities and Exchange Commission

                  - ABOUT
                  - DIVISIONS
                  - ENFORCEMENT
                  - REGULATION
                  - EDUCATION
                  - FILINGS
                  -  NEWSROOM 

				Investor Information			

                  - 							Investor Alerts and Bulletins						
                  - 							Fast Answers						
                  - 							Investor Reports/Publications						
                  - 							Tools and Calculators						
                  - 							Education Resources						
                  - 							Información en Español						
                  - 							Contact						

Company Filings | More Search Options