BEWARE: PENNY STOCK SCHEMES ON THE RISE. 5 things the SEC says you should do before making any investments: 1. Research whether the company has been dormant – and brought back to life. You can search the company name or trading symbol in the SEC’s EDGAR database to see when the company may have last filed periodic reports. 2. Know where the stock trades. Most stock pump-and-dump schemes involve stocks that do not trade on The NASDAQ Stock Market, the New York Stock Exchange or other registered national securities exchanges. 3. Be wary of frequent changes to a companys name or business focus. Name changes and the potential for manipulation often go hand in hand. 4. Check for mammoth reverse splits. A dormant shell company might carry out a 1-for-20,000 or even 1-for-50,000 reverse split. 5. Know that Q is for caution. A stock symbol with a fifth letter Q at the end denotes that the company has filed for bankruptcy.
Posted on: Thu, 30 Oct 2014 15:23:30 +0000
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