Josh Yudell teaches how to avoid micro-cap scams

Cheap stock fraud typically involves 1 or several sorts of trader scam: Pump and dump plans that use fake or perhaps misleading phrases to hype up shares, that are then “dumped” on the public at blown up prices, usually through telemarketing or Web scam; slice stocks, or stocks bought for cents but marketed for bucks, giving both agents as well as marketers massive profits “under the table” in undisclosed payoffs; as well as dump and dilute schemes, wherein fraudulent companies give out stocks repeatedly, reverse-splitting the shares or altering their titles. Following are a few methods to guard yourself against such scams:

Josh Yudell teaches how to avoid micro-cap scams

Be instantly cautious about unsolicited emails as well as of web chat rooms plus advertising boards that aggressively hawk particular stocks attested Josh Yudell. Shady individuals (often utilizing online aliases) who provide microcap share information might be unscrupulous broker agents, or business insiders who want to dump their stocks on you.

Josh Yudell teaches how to avoid micro-cap scams

Beware of unsolicited telephone calls from high-pressure telemarketers. Cheap stock counterfeiters frequently operate from “boiler rooms,” or short-term workplaces with banks of phones manned by manipulative salespersons, parroting scripted pitches to push stocks using unbelievable-sounding guarantees. Don’t ever let your self to be pressured! Don’t invest in some thing you don’t comprehend ? especially when you take note of the words “inside information,” “100% assured,” or perhaps “once-in-a-lifetime opportunity.” The very best thing you may do is ? hang up the phone! Much better but, use an answering machine to screen calls.

Josh Yudell teaches how to avoid micro-cap scams

Ask your dealer for his or her CRD (Central Registration Depository) number. Call your state securities office to learn if your dealer possesses a disciplinary record of some sort, and if the investment they’re pushing is appropriately listed. Don’t at any time transact with agents who can’t provide you with published information concerning the investments they’re selling.

Josh Yudell teaches how to avoid micro-cap scams

The SEC may suspend the trading of any share for as much as ten days if it thinks that information or press announcements about the company is unreliable or perhaps false. Once the stock you are interested in has been the subject of a SEC suspension, think twice prior to shelling out your shekels. You will discover up-to-date details about the most recent trading suspensions from the SEC’s public web site.

Josh Yudell teaches how to avoid micro-cap scams

Josh Yudell noted a SEC general rule referred to as “Regulation S” allows businesses to not need to sign-up stock they sell outside the U.S. to overseas (or “off-shore”) investors. Within a common off-shore scam, dishonest companies promote non listed Reg-S stocks at huge discounts to counterfeiters who pose as off-shore investors. Such con artists then sell the stock again to unwary U.S. investors at extremely blown up prices, pocketing huge earnings that they usually share with business insiders.

Josh Yudell teaches how to avoid micro-cap scams

If you think you’ve been the victim of penny stock fraud, keep in mind that according to the law, you only have a limited time period of time to get legal action. Speak to your agent right away, and find out precisely what occurred? Who stated what, when? Did you take notes concerning exactly what you were advised at the time? In case you think your broker engaged in fraudulent dealings, put your grievance on paper immediately and send it to their agency. This could be the only method to show that you complained to them.

Josh Yudell teaches how to avoid micro-cap scams

If you’re still not happy, send a letter to the state securities regulator, attaching copies of all the communications you have sent to the brokerage. If not, deliver your grievance to the SEC directly utilizing their on-line complaint type. Josh Yudell is a Wall Street veteran, having spent his entire career in the fields of investor relations and investment banking.