The Signs of an Energy Stock Scam

The current state of the environment and economy, ranging from rising gas prices to an outcry for reduced pollution, has surged the interest in energy and alternative energy stocks. According to the Financial Industry Regulatory Authority (FINRA), this interest appears to have sparked an increase in energy-related stock scams.

FINRA issued a warning to investors regarding this type of investment fraud. Energy stock scams tend to involve a company that is not known and is typically small. There are often a lot of misrepresentations and predictions made in an attempt to attract investors. Scam artists use these schemes to get people to invest, which bump up the price of the stock. They then sell their shares, leaving investors with stock that is basically of no value.

There are legitimate energy investments out there, but it can be difficult trying to separate the good from the bad. Here are a few of the warning signs of an energy stock scam:

• Promises of immediate payoffs.
• Unsubstantiated claims regarding new products, contracts or future stock price.
• Stock doesn’t meet the requirements of one of the major national exchanges, such as the NASDAQ Stock Market or the New York Stock Exchange (NYSE).
• Predictions of huge returns.

It is important to mention that there are some schemes out there that promote interests in fraudulent oil and gas limited partnerships. You need to be cautious when considering investing in such a limited partnership.

If you have lost money due to an investment scam, whether it was an energy stock or some other investment, we may be able to help you. The experienced investment fraud attorneys at the law firm of David P. Meyer are licensed in Ohio and California and we represent investors nationwide in securities arbitration and litigation claims. We have helped over 800 investors across the country recover their money.

Call us toll-free at 1.866.827.6537 or fill out our contact form for your free case evaluation.