According to the North American Securities Administrators Association, this is a prime time for investment scams. At the end of the bull market, investors still have expectations of a 20 percent return. How do you reconcile that with a 20 percent expectation. When tech stocks were still flying high, investigators saw a lot of abuses by day trading firms, says Matt Nestor, director of the Massachusetts Securities Division. Firms were misleading people about the risk.
Day trading is very difficult and people lose money.
They were saying just the opposite. They weren't saying that close to 90 percent of their clients are out of business in a year. With the market correction, the bloom is off the rose as far as day trading goes. Now the scam action has shifted to the chat rooms and message boards. Short-selling stocks is a legitimate investment method where the investor capitalizes on the stock price dropping.