Investment Fraud Attorneys Explain How to Avoid a “Pump and Dump” Scam

As the changing face of the Internet allows us to conveniently reach millions of people around the world, fraudsters have been busy figuring out new ways to make that technology work for them. Although it has always been a popular form of investment fraud, the widespread use of online communication has increased the prevalence of the classic “pump and dump” scam, in which a worthless stock is falsely “pumped” up for a profit and then “dumped.”

As investment fraud attorneys, we encourage investors to read through the following tips on avoiding “pump and dump” scams and always proceed with caution when making online investments. In order to avoid a “pump and dump” investment scam when faced with a new investment opportunity, you should always:

• Be hesitant to listen to recommendations from strangers, especially those that promise an impending announcement from a company or a new product.

• Be suspicious of “limited-time offers” or promises of huge profits.

• Don’t give in to high-pressure sales tactics or increasingly aggressive marketing.

• Be sure that the stock trades on a national exchange.

• Be wary of any investment tips or offers that you receive online, especially those that come through your email or social media sites.

• Do your research before you invest, and make sure that everything looks the way the promoter claims it should.

It always pays to be suspicious of any investment opportunity that sounds too good to be true. If you are offered an investment tip from someone you don’t know, you should take the time to do some careful research before handing over your cash.

If you have already been the victim of a pump and dump scam, please speak with one of our highly experienced investment fraud attorneys today at 1-866-8-BROKER (1-866-827-6537) to learn more about your rights. For more information about protecting yourself and your family from investment fraud, request your completely FREE copy of David P. Meyer’s must-read book Five Signs of Investment Fraud …And What to Do if it’s Happened to You.