The United States and the rest of the world are facing unprecedented challenges due to the coronavirus pandemic. Also known as Covid-19, this virus has essentially shut down the economy in the United States, and it has devastated investment portfolios. Many people have had to stand by and watch as their retirement accounts lose hundreds of thousands of dollars. Unfortunately, as is the case in any major economic collapse, there are people who will fraudulently take advantage of the situation. To that end, the US Securities and Exchange Commission has issued a coronavirus-related investment scam alert.
What Does the SEC Alert Say?
The SEC’s Office of Investor Education and Advocacy is issuing an investor alert to warn any investor about investment frauds that may be perpetrated in the midst of the coronavirus pandemic. They say that many companies could claim that they have products or services that will be used to help stop the coronavirus virus outbreak. The SEC alert says that fraudsters “often use the latest news developments to lure investors into scams.”
The SEC says that they have become aware of a number of promotions on the Internet, including through social media, claiming that products or services of publicly-traded companies will be able to “prevent, detect, or cure coronavirus.” Fraudsters will then claim that the stock of these companies will dramatically increase as a result.
The SEC says the following:
- Be cautious of any claims that a company’s products or services will help stop the coronavirus pandemic. Specifically, they say investors may be duped into falling for a “pump and dump” scheme, which is an attempt to boost a stock price through recommendations based on false or misleading statements.
- The SEC cautions that you could lose a significant amount of money if you invest in a company that makes unreliable or inaccurate claims. They say that you may not be able to sell your shares if trading in the company is suspended by federal regulators.
Investors should be particularly aware of microcap stocks. These are typically low-priced stocks issued by small companies. There is often very little publicly-available information about the management of a microcap company, making it easier for fraudsters to spread false information and manipulate the price of the stock.
Do You Need to Contact an Attorney for a Coronavirus Pump and Dump Scheme?
As the country goes through an incredibly difficult time due to the outbreak of coronavirus, the last thing that anybody needs to worry about is being taken advantage of by fraudsters. Fortunately, this is simply a reality of situations like this.
If you believe you have been the victim of an investment-related scam, seek legal assistance from a skilled attorney immediately. This is certainly the case if you think someone is taking advantage of you or a loved one during this time of national economic crisis. At Meyer Wilson, our attorneys have extensive experience handling these types of cases. We will conduct a thorough investigation into what happened and work to secure any compensation you are entitled to. You can contact us by calling (800) 738-1960 or contact us online to speak confidentially with an attorney today.