About
Community
Bad Ideas
Guns & Weapons
Irresponsible Activities
KA-FUCKING-BOOM!
Locks and Security
Scams and Rip-offs
Drugs
Ego
Erotica
Fringe
Society
Technology
register | bbs | search | rss | faq | about
meet up | add to del.icio.us | digg it

Online Investment Schemes


NOTICE: TO ALL CONCERNED Certain text files and messages contained on this site deal with activities and devices which would be in violation of various Federal, State, and local laws if actually carried out or constructed. The webmasters of this site do not advocate the breaking of any law. Our text files and message bases are for informational purposes only. We recommend that you contact your local law enforcement officials before undertaking any project based upon any information obtained from this or any other web site. We do not guarantee that any of the information contained on this system is correct, workable, or factual. We are not responsible for, nor do we assume any liability for, damages resulting from the use of any information on this site.



NASAA INVESTOR BULLETIN
\\\\\\\\\\\\\\\\\\\\\\\\\\\\\
ONLINE VERSION
/////////////////////////////

(Details on how to get the full text
version of this document are set out below.)

ONLINE INVESTMENT SCHEMES
Fraud and Abuse in Cyberspace

Unwary investors are in danger today of being taken for a ride on the
information superhighway. State securities regulators are concerned about
the surge in illicit investment schemes on commercial online services (such
as Prodigy, America Online and Compuserve), dedicated bulletin boards
and the informal web of computer networks that make up the Internet. Four
million U.S. households with computers and modems providing access to
the online world are already being exposed to hundreds of fraudulent and
abusive investment schemes, including stock manipulations, pyramid scams
and Ponzi schemes.

On June 30, 1994, the New Jersey Bureau of Securities and the Securities
Division of the Missouri Secretary of State announced the first major
regulatory actions against consumer fraud and abuse in cyberspace. At
least seven state securities agencies now have a total of more than two
dozen investigation into investment-related cyberschemes underway,
according to the North American Securities Administrators Association
(NASAA), the national voice of the 50 state securities agencies.

As NASAA President and Iowa Securities Bureau Chief Craig Goettsch
explains: "Unfortunately, the same technology that works to inform and
empower small investors is now being used to pick their pockets. I want to
make it clear that state securities regulators are not 'technophobes.' We are
not here to bash the commercial online services or to suggest that people
steer clear of the Internet. Our sole concern is with the swindlers and other
sharp operators who are exploiting cyberspace. The problem is not
cyberspace; the problem is the misuse and abuse of cyberspace."

(FOR A REVIEW OF MAJOR INVESTMENT FRAUD AND ABUSE CASES
NOW BEING HANDLED BY STATE SECURITIES AGENCIES, SEE THE FULL
TEXT OF THIS "BULLETIN.")

MAJOR TYPES OF INVESTMENT CYBERSCHEMES

State securities regulators have identified the following as being among the
most common investment fraud and abuse problems in the online world
today:

o Manipulation of obscure, thinly-traded stocks. Most commercial bulletin
board services allow individuals to post messages not only under an alias
... but multiple aliases. Since it may be impossible for another subscriber
to ascertain the true identity of the individual behind the message (or even
if a series of messages are being entered by just one individual under
various aliases), there is enormous potential for manipulation of little-known
companies that have a small float (the number of shares available to be
bought and sold). Acting alone or with accomplices, a company insider,
broker, public relations executive or even just a large shareholder can leave
numerous messages calculated to spark interest in an obscure stock.
Among the most popular targets for cyber-manipulation today are Canadian
gold, silver and diamond mining stocks.

o Misconduct by phony or unlicensed brokers/investment advisers. Here,
states are concerned that brokers may be attempting to drum up new
business ... without the supervision of their employers and while making
liberal use of illegal assurances about the potential for profit in certain
investments. This problem goes far beyond the oral comments that an
aggressive broker might make to a sophisticated client, since an online
message is available to hundreds of thousands of investors. Additionally,
states are concerned about brokers who may try to rope in new clients
without regard for the clear state interest in keeping individuals with a
history of fraud and abuse outside of their borders.

o Undisclosed interests of promoters. The anonymity of cyberspace is
exploited to the hilt by schemers who promote fraudulent and abusive
investment schemes. In reading a bulletin board message about a stock,
you have no way of knowing if the person involved is a company official, PR
representative or market-making brokerage firm. Has the person hyping the
stock been paid to do so and, if so, has that fact been disclosed? In some
cases, the role of the person involved in the scheme is such that he or she
is considered by regulators to be an "agent" of the stock issuer and, as a
result, is subject to strict legal requirements about public statements,
disclosure language and penalties for intentional "misrepresentations and
omissions" intended to move stock prices.

o Promotion of "exotic" scams. Hundreds of messages have been posted
in cyberspace promoting a wide variety of highly suspect, unregistered
investment deals (e.g., wireless cable television "build-out" schemes, ostrich
farming, and viatical settlements), as well as flat-out rip-offs (e.g., pyramid
schemes, including a number of twists on "chain e-mail letters," and Ponzi
scams). These so-called "exotic" securities may pose a greater threat to
consumers than other investment-related cyberschemes, since out-and-out
scams often appeal to individuals who do not feel sophisticated enough to
speculate in stocks.

PROTECTING YOURSELF AGAINST ONLINE INVESTMENT SCHEMES

What are the rules of the road for investors who decide to travel the
information superhighway? States securities regulators recommend the
following self-defense steps:

o Don't expect to get rich quick. The online world is filled with timely and
accurate information that can help you become a smarter investor.
Unfortunately, it also is home to a growing amount of investment fraud and
abuse. The trick here is to keep your excitement and expectations about
the promise of the online world in perspective. Always evaluate the
information you get online in the same way that you would any investment-
related news article, television report or whispered "hot tip."

o Don't assume that your online computer service polices its investment
bulletin boards. Most don't. The vast majority of services take a "hands off"
attitude to validating claims made in message postings.

o Don't buy thinly-traded, little-known stocks strictly on the basis of online
hype. These are the stocks that are most susceptible to manipulation;
unlike blue chips and other stocks with substantial floats (the number of
shares available to be bought and sold), the price of low-volume stocks can
be moved through relatively small strategic trades. This is why online hype
usually involves previously unknown securities. Always take the time to do
your own research using reputable resources, many of which are available
online.

o Don't act on the advice of a person who hides his or her identity. Keep
in mind that many computer bulletin board services allow people to use
aliases and nicknames. Though this is intended to protect privacy, it also
can be exploited by fast-buck artists. As a result, you may end up dealing
with an undisclosed broker, investor, or company insider intent on driving
up the price of a stock through false information or baseless speculation
that is difficult or impossible to disprove. Don't assume that two (or more)
people talking up a stock are actually two (or more) different people!

o Don't get suckered by claims made about "inside information," including
pending news releases, contract announcements and products. Investment
bulletin boards and discussion groups are crammed with hot tips about
impending developments sure to send a stock soaring in value. Just
because these tips appear in cyberspace does not mean that they are
exempt from U.S. insider trading laws and rules.

o Don't assume that just because someone says that they have checked
something out that they have done so. Online stock hypesters make all
sorts of claims about visiting companies, inspecting mining operations, and
having personal conversations with company officials. Keep in mind that
you may not be able to verify who is making these claims ... much less
whether any of the information is true or the supposed research ever took
place.

o Don't forget to make sure FIRST that an investment opportunity and the
person promoting it are properly registered with your state securities
agency. Laws designed to protect small investors from fraud and abuse do
apply in cyberspace. A failure by an issuer or broker to follow the state
requirements here is often a major "red flag" of an investment scheme. If
you do not know how to reach your state securities agency, call NASAA at
202/737-0900.

ABOUT NASAA

State securities regulators are the first line of defense for small investors in
the U.S. The 50 states securities agencies are the members of the North
American Securities Administrators Association (NASAA), which is
headquartered in Washington, D.C. The full text of this "Bulletin" is available
at no cost via snail mail to those who write: "Cyberschemes," NASAA, One
Massachusetts Avenue NW, Suite 310, Washington DC 20001. For more
information about NASAA or your state securities agency, call 202/737-0900.

Your comments are welcome. Our e-mail address is: "[email protected]"


 
To the best of our knowledge, the text on this page may be freely reproduced and distributed.
If you have any questions about this, please check out our Copyright Policy.

 

totse.com certificate signatures
 
 
About | Advertise | Bad Ideas | Community | Contact Us | Copyright Policy | Drugs | Ego | Erotica
FAQ | Fringe | Link to totse.com | Search | Society | Submissions | Technology
Hot Topics
Robbing a dealer out of state (hypothetical)
Want Revenge on Some Guy's Car
Found CHeck
Breaking into garages?
House Arrest
Free Logitech Products Wihtout Owning
Urban Exploration
graffiti on google earth.
 
Sponsored Links
 
Ads presented by the
AdBrite Ad Network

 

TSHIRT HELL T-SHIRTS