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FINRA

 

 

FOR RELEASE:
CONTACTS:
Wednesday, December 28, 2005
Nancy Condon (202) 728-8379
Sarah Bohn (202) 728-8988

 

 

Bird Flu Stock Scam Hazardous to Financial Health, NASD Alert Warns

Washington, DC — NASD issued an Investor Alert today warning investors to be wary of unsolicited faxes, spam and even text messages promising large market gains for investments that purport to capitalize on helping protect against global pandemics like the Bird Flu or Avian Influenza.

 

NASD's Investor Alert, Bird Flu Stock Scam Could be Hazardous to Your Financial Health, explains how investors can spot and protect themselves from investment scams involving companies that claim to have products and services that fight the Bird Flu. One example includes a fax stating a company "has the solution for tracking and containing the Bird Flu virus." Citing the enormous cost of fighting the Bird Flu, the fax claimed the stock was "positioned to gain 250% or more Short-Term." The fax went on to urge investors not to miss out on a stock that was "clearly missed by Wall Street."

 

"This is an age-old pump-and-dump scheme with a brand new disguise," said NASD Vice President of Investor Education John Gannon. "Unfortunately, fraudsters are quick to exploit every new crisis or catastrophe to peddle their get-rich-quick scams to unsuspecting investors."

 

The Alert warns investors not to rely solely on the information in unsolicited faxes, e-mails or text messages because they often come from corporate insiders who are paid to promote the stock. Investors are advised to further investigate when unsolicited messages include predictions of exponential growth and exaggerated claims of how a possible bird flu outbreak would contribute directly to the company's bottom line.

 

For additional resources related to this topic, see NASD's Investor Alerts: Beware of "Hot" Stock Tips on Your Cell Phone; Beware of Stock Fraud in the Wake of Hurricane Katrina; and Stock Spams and Scams. To receive NASD's latest Investor Alerts and other important investor information via email, sign up for NASD's Investor News.

 

NASD is the leading private-sector provider of financial regulatory services, dedicated to bringing integrity to the markets and confidence to investors through effective and efficient regulation and complementary compliance and technology-based services. NASD offers a broad range of tools and programs to help people better understand investing and know how to protect themselves along the way — including developing and publishing Investor Alerts, brochures and online resource guides on such critical topics as mutual fund class shares and 401(k) and college savings plans. NASD has distributed this information through its Web site, printed materials and Investor Forums.

 

NASD touches virtually every aspect of the securities business — from registering and educating all industry participants, to examining securities firms, enforcing both NASD rules and the federal securities laws, and administering the largest dispute resolution forum for investors and registered firms. For more information, please visit our Web site at www.nasd.com.