Learn How to Spot and Avoid China Stock Scams Investor Claims Is What We Do - All Day, Every Day

Learn How to Spot and Avoid China Stock Scams

The Financial Industry Regulatory Authority (FINRA) has issued a warning to investors regarding so-called “China” stocks. According to FINRA’s warning, some of the companies that have been advertising China stocks have no real connection to the country’s stock markets.

While there are legitimate opportunities connected with the Chinese stock markets, there are also a lot of investment scams. If you have received a solicitation via fax, email or text message, you need to beware. Some of these advertisements may place urgency on purchasing large amounts of China stocks. Scam artists will use this tactic to inflate the price of the stock and will then sell off their shares. Investors are then left with a stock valued far below the original price.

Signs That It Could Be an Investment Scam

FINRA outlined the common characteristics of China stock schemes, which include:

  • Pressure to invest right away
  • Using headlines from respected financial news sources, which may be taken out of context
  • Making predictions of tremendous growth
  • Claiming that it is easy to make profits in China
  • Statements that tie the growth of the advertised company with the success of other, unrelated Chinese companies
  • Explanation of how certain actions by the Chinese government will create demand

How to Avoid Becoming a Victim of Investment Fraud

Before making any type of investment, you need to do your due diligence. You can check out the company on the Securities and Exchange Commission’s (SEC) EDGAR database. If the company is registered and trades with the SEC, you should analyze the reports carefully and verify any information you have been told. You should also review the description of the type of business the company is engaged in and find out if it changed its focus at any time.

It is important to know where the stock trades. There are certain requirements that must be met for it to be listed on one of the major national exchanges, such as the NASDAQ Stock Market or New York Stock Exchange (NYSE). When FINRA issued its warning to investors about China stocks, only 10 companies beginning with “China” in their name were traded on the NYSE and as few as 9 were traded on NASDAQ. Even after doing your homework, you should still be wary about investing in a stock that was touted in an unsolicited message.

The Meyer Wilson Way

Results-Focused Representation
  • More than $350,000,000 Recovered
  • Voted Best Lawyers in America® for over Ten Years Running
  • David Meyer is President of Public Investors Advocate Bar Association (PIABA)
  • Over a Thousand Investor Claim Cases Since 1999
  • Exclusive Focus on Investor Claims & Class/Mass Action Lawsuits
  • Deep Bench of Skilled Attorneys and Staff Members

We Recover Investment Losses

Helping You Take Back What Is Yours
  • Jury Verdict Won Against Prudential Securities $262 Million
  • Recovered for 100-Year Old Widow $30 Million
  • Recovered in Retirement Losses $10 Million
  • Recovered for a Large Group of Individual Investors $6.5 Million
  • Recovered for Elderly Victim in Ponzi Scheme Case $3.8 Million
  • Recovered for Elderly Ponzi Scheme Victim $3.2 Million
  • Recovered for More Than 50 Families of Ponzi Scheme in California $3.2 Million
  • Recovered for 35 Families in Northeast Ohio $3.1 Million
  • Losses Recovered for 20 Retirees $3 Million
  • Recovered for Retired Physician Against Major Wall Street Firm Prior to Filing FINRA Arbitration $2.5 Million

Talk to Our Team

Get Started with a Free Evaluation
  • Please enter your first name.
  • Please enter your last name.
  • Please enter your phone number.
    This isn't a valid phone number.
  • Please enter your email address.
    This isn't a valid email address.
  • Please make a selection.
  • Please enter a message.