The Financial Industry Regulatory Authority (FINRA) and the US Securities & Exchange Commission Office of Investor Education and Advocacy (SEC) jointly issued a warning to investors regarding the use of dormant shell companies to commit fraud on unwary investors.
Dormant shell companies are often used in a pump and dump scheme where the scammer buys the low priced, rarely traded stock and then sets out to create a phony marketing scheme fueled by press releases that falsely pump up the value of the stock.
Once the price has been pumped up by the false information, the scammer dumps his stock at the higher price and thereafter the stock value falls back to its original low price.
Investors considering placing funds into a penny stock investment would be wise to read the FINRA/SEC alert in its entirety.
CITYSIDE TICKETS PUMP AND DUMP-This week the SEC filed an action against a California lawyer and two residents of Massachusetts for a pump and dump scheme involving CitySide Tickets, Inc. See this for more.
Rex Securities Law provides nationwide representation to investors seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.
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