The Securities and Exchange Commission and the Financial Industry Regulatory Authority on Wednesday warned investors about a “sharp increase” in email linked to “pump-and-dump” stock schemes.
The investor alert, Inbox Alert – Don’t Trade on Pump-And-Dump Stock Emails, says that the latest McAfee Threats Report confirms “a steep rise” in spam email linked to “pump-and-dump” stock schemes designed to trick unsuspecting investors.
These false claims, the alert says, could also be made on social media such as Facebook and Twitter as well as on bulletin boards and chat room pages.
Lori Schock, director of the SEC’s Office of Investor Education and Advocacy, said in a statement that “investors should always be wary of unsolicited investment offers in the form of an email from a stranger. The best response to investment spam is to hit delete.”
Cameron Funkhouser, executive vice president of FINRA’s Office of Fraud Detection and Market Intelligence, added in the same statement that “Spam email is the bait used to lure people into making bad investment decisions. No one should ever make an investment based on the advice of an unsolicited email.”