It didn’t take long for fraudsters to find a way to take advantage of the catastrophic oil spill in the Gulf of Mexico. The Financial Industry Regulatory Authority (FINRA) has reported that there is a financial threat to investors associated with oil spill stock scams. Apparently, investors are being promised financial gains by investing in companies that allege to be involved in clean-up.
Since the Deepwater Horizon oil rig exploded in the Gulf of Mexico, causing oil to billow into the water on a daily basis, millions of dollars have been spent in the cleanup efforts. As of the date of this article, the long-term costs are still unknown. While experts are looking for ways to cleanup the oil and stop the leak, scam artists are formulating ways to profit.
Know the Signs of an Oil Spill Scam
There are some ways that you can detect an oil spill stock scam. You need to be cautious if you read a press release, unsolicited fax or spam email that contains the following:
- Statements that the company has the products or technologies that would aid in restoring the ecosystem or addressing the oil spill
- Claims that the company has, or is expecting to have, a contract with BP
- Pressure to invest right away in the stock
- Claims that the company is advising BP or a government department
- Predictions of tremendous growth
Avoid Financial Loss in an Investment Scheme
As with any investment, you need to do your homework first and don’t rely on the claims and promises made by the company and/or solicitor. Find out where the stock trades and inquire into the company’s SEC filings. Be especially careful if the stock is touted as having immediate payoffs.