If you have money you can be a target of stock market fraud. If you want to save your money from stock market fraud than you must keep some essential things in mind so that you can avoid stock fraud .
Do as much inquiry as you can on the company, the product or service,and particularly the salesperson. Even the most prestigious company can have a fraudster in their mind. You can go onto the company’s web site to look at the company’s financial statements and records, as well as salesperson’s disciplinary history in the site’s broker and adviser databases.
The FINRA is another great resource to check on brokers. At the end of the day, it’s estimable to deal with someone to whom you already know and trust, or someone with whom you have a mutual friendship, or who can handle your investments, but that doesn’t mean you shouldn’t do a little background checking on him or her as well. Also, make sure there is current information about the company, as well. Remember — there’s no harm in a little investigation, especially when it comes to your money.
Be aware of stock offers you get via e mail, fax or Internet postings on social networking sites. In early October a $7 million stock fraud “pump-and-dump” scam was uncovered involving the use of Face book and Twitter to post stock offerings. Be extra careful about “off-shore” investments ; it will be much harder to deal with stock fraud abroad.
If something sounds too good to be true, especially if general atmosphere in the stock world is not one of prosperity. Don’t let yourself be blinded by the prospect of raking in a lot of cash, particularly when something feels a bit off. “Guaranteed returns” do not exist. There is always the chance that you’ll lose money on an investment in the stock market, no matter how much analysts try to predict what will happen is unpredictable, and any broker who tells you either doesn’t know what he or she is talking about, or knows exactly what he or she is talking about. Even promises of extremely high returns should be considered with caution.
Just because a company has a professional-looking web site doesn’t mean they are a professional company. It’s incredibly easy to create a good web site these days — there are hosting sites that come with thousands of pre-made designs — and costs next to nothing to buy a custom domain name.
If a company is not giving you a written contract, there is a problem. Any legitimate company should be perfectly happy to give you the particulars in writing.
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