The Financial Industry Regulatory Authority (FINRA) recently released an investor alert cautioning investors of potential stock fraud in the wake of Hurricane Dorian. FINRA noted that financial fraud and potential investment scams regularly follow a natural disaster. Such scams can take the form of unsolicited phone calls, emails and texts about investments related to the natural disaster. FINRA’s investor alert highlights certain unsolicited communications about investments that exploit the latest natural disaster of which investors should be mindful, including price targets or predictions of exponential growth, pressure to invest immediately and mention of contracts or affiliations with federal government agencies or well-known companies.
To avoid potential scams, FINRA advises investors to (1) investigate the relevant investment professionals before investing, (2) find the source of the message, (3) find out where the potential stock trades, and (4) read the company’s SEC filings.
A full copy of the investor alert is available here.