NASD's Investor Alert, Bird Flu Stock Scam Could Be Hazardous To Your Financial Health,explains how investors can spot and protect themselves from investment scams involving companies that claim to have products and services that fight the Bird Flu. One example includes a fax stating a company "has the solution for tracking and containing the Bird Flu virus." Citing the enormous cost of fighting the Bird Flu, the fax claimed the stock was "positioned to gain 250% or more Short-Term." The fax went on to urge investors not to miss out on a stock that was "clearly missed by Wall Street."
"This is an age-old pump-and-dump scheme with a brand new disguise," said NASD Vice President of Investor Education John Gannon. "Unfortunately, fraudsters are quick to exploit every new crisis or catastrophe to peddle their get-rich-quick scams to unsuspecting investors."
The Alert warns investors not to rely solely on the information in unsolicited faxes, e-mails or text messages because they often come from corporate insiders who are paid to promote the stock. Investors are advised to further investigate when unsolicited messages include predictions of exponential growth and exaggerated claims of how a possible bird flu outbreak would contribute directly to the company's bottom line.
For additional resources related to this topic, see NASD's Investor Alerts: Beware of "Hot" Stock Tips on Your Cell Phone; Beware of Stock Fraud in the Wake of Hurricane Katrina; and Stock Spams and Scams. To receive NASD's latest Investor Alerts and other important investor information via email, sign up for NASD's Investor News.
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