finra

FINRA

For Release:
Contacts:
Thursday, November 15, 2001
Nancy A. Condon
202-728-8379
Michael Shokouhi
202-728-8304



 

NASD Alerts Investors on Terrorism and Anthrax Investment Scams

Washington, D.C. — The National Association of Securities Dealers, Inc. (NASD®) today issued an Investor Alert cautioning investors of investment scams that cropped up around recent Anthrax scares and other terrorist-related events. Recommendations of stocks of companies that make defense, anti-terrorism, or biological detection products have increased in the past few weeks. While some of these claims may be true offers, many could turn out to be fraudulent hoaxes designed to inflate the price of the stocks. Recently, The Nasdaq Stock Market® and the Securities and Exchange Commission (SEC) have halted trading of companies because of questions regarding the accuracy of the companies' claims.

 

The Investor Alert, titled "Fears of Anthrax and Terrorism Spawning Investment Scams," is available on www.nasd.com. The Investor Alert explains how to spot possible investment scams, and how to avoid being drawn into a potential hoax.

 

The Alert lists some of the claims to look out for that may be included in unsolicited faxes and emailed spam:

  • Claims that a company possesses products, "newly developed" technologies or services that will aid the U.S. anti-terrorism efforts or protect consumers from biological threats, such as anthrax;
  • Patriotic claims or appeals;
  • Mention of contracts or affiliations with federal government agencies;
  • Comparisons to well-know companies operating in the defense, security or pharmaceutical industries;
  • Standard corporate developments, like contracting with a supplier, presented as major events;
  • Terms, such as anthrax, anti-terrorism, World Trade Center attacks, to increase the impact of the message;
  • Price targets or predictions of exponential growth in a short period of time; or
  • Urgency, such as "You must act now!!"

The Alert also provides some pointers on avoiding a potential scam:

  • Investigate before you invest.
  • Find out who sent the message.
  • Find out where the stock trades.
  • Read a company's public filings.

Investors can view Investor Alerts, obtain more information about NASD and NASD Regulation, as well as the disciplinary record of any NASD-registered broker or brokerage firm. Disciplinary records of NASD-registered brokers or firms can also be accessed by calling (800) 289-9999.

 

NASD Regulation oversees all U.S. stockbrokers and brokerage firms. NASD Regulation, The American Stock Exchange®, and NASD Dispute Resolution, Inc. are subsidiaries of the National Association of Securities Dealers, Inc. (NASD®), the largest securities-industry self-regulatory organization in the United States.