You may have heard about nutraceutical stock scams in the news recently, and it’s important to be aware of how these scams work and how you might hear about them. As an investment fraud lawyer, I can say that new trends often influence fraudsters, and it’s not a big surprise that the new and growing nutraceutical market has attracted a few bad apples. Although not every nutraceutical company is a scam, FINRA has cautioned investors to approach these investments carefully and be on the lookout for a potential “pump and dump” scam.
What is a Nutraceutical?
The term “nutraceutical” is used to describe a range of products that are based on vitamins, supplements, additives, and other natural or purportedly beneficial sources. You may have seen these products in the form of energy drinks, weight loss supplements, food items, or even natural cold remedies. Many of these opportunities are promoted online or via unsolicited email or calls.
How Do Nutraceutical Stock Scams Work?
Most of these scams are essentially a “pump and dump” scam. The fake company or product is heavily promoted in order to attract a large number of investors and falsely pump up the price of the stock. Once the price has gotten as high as it will go, the fraudsters will sell off or “dump” their shares and leave investors holding worthless stock.
Meyer Wilson represents harmed investors nationwide in stockbroker mediation, arbitration, and litigation, and we’d be happy to discuss your options with you if you have suffered losses. Give us a call today to schedule a completely free and confidential legal consultation with one of our experienced investment fraud attorneys.