Updated: May 21, 2020
BBB continues to warn consumers about the possibility of investment scams related to COVID-19. An investor alert was issued by the SEC in February warning about an increase in scams that claim the products or services of specific publicly-traded companies can prevent, detect or cure COVID-19, and that the stock of these companies will increase in value as a result.
How it works: Scammers first buy penny stocks in a small company with limited publicly-available information on the company’s products, services and finances. They then boost the company’s stock price by circulating fake research reports that include estimates of how high the future stock price could jump, and encouraging investors to act fast to take advantage of the windfall. When the stock hits a high point, the scammers dump their shares, leaving the unsuspecting investors holding the bag.
BBB advises investors to be wary of any COVID-19-related offers that promise quick, sizable earnings, especially those related to cures, treatments or remedies for COVID-19. Remember, if it sounds too good to be true, it probably is.
Contact www.bbb.org to find a reputable investment advisor before investing your hard-earned money. Report any suspicious activity to www.scamtracker.org.