Don’t Let a Social Media Scam Steal Your Money
While most of us have come to realize the significance of social media, which encompasses such sites as Facebook, Twitter and YouTube, the statistics are still staggering to hear. Facebook boasts more than 500 million active users and was valued at close to $50 billion in January 2011. Twitter supposedly has nearly 200 million subscribers, while approximately 2 billion videos are viewed daily on YouTube. It is no wonder why scam artists have found a golden opportunity in social media.
The Financial Industry Regulatory Authority (FINRA) recently issued a warning to investors about pre-IPO offerings. The U.S. Securities and Exchange Commission (SEC) defines pre-IPO investing as "buying a stake in a company before the company makes its initial public offering of securities." Both the SEC and FINRA have described this type of investing as risky, since it involves purchasing unregistered shares in a private company.
Social Media Scams Are On The Rise
As social media companies have continued to grow exponentially, investment schemes have popped up. According to FINRA's warning to investors, there are reports of "potentially fraudulent schemes that have solicited potential victims by purporting to sell shares of Facebook." FINRA has therefore advised investors to be wary of pre-IPO scams involving Facebook and other social media companies.
Below are some of the ways to avoid losing money in a social media investment scam:
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Consider how the offer was made. Investment scams frequently come in the form of unsolicited offers. Don't fall for the promises of high returns and ask yourself why a complete stranger would offer you a great investment opportunity.
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Look into the salesperson's background. Is this person licensed? Does he or she have a criminal history? Have any complaints been made? Contact your state securities regulator and use FINRA's BrokerCheck to get the information you need.
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Do your own investigation. A lot of information is available at your fingertips. Get on the Internet and start searching for details about the offer that was made to you. You should also search for information about the salesperson who solicited you and the company that was mentioned.
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Talk with a professional. If you are seriously considering investing in a pre-IPO offer, you should speak with a lawyer or other professional first.
An Investment Fraud Attorney May Be Able to Help You
If you have lost money in a pre-IPO scam, we may be able to help you recover your losses. For more information, contact an experienced investment fraud lawyer at the law firm of Meyer Wilson, LPA by calling toll-free 1.866.827.6537 or filling out our online form.
Be sure to order a FREE copy of attorney David Meyer's book, Five Signs of Investment Fraud...And What to Do if it's Happened to You. You can learn more by reading the book description below.
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