Fraudsters often use news and popular events to lure individuals into scams. The SEC has issued an investor alert warning individual’s about potential scams related to the coronavirus. The SEC has become aware of various Internet promotions, including on social media, claiming that products or services of publicly-traded companies can prevent, detect, or cure coronavirus. As a result, the stock of these companies should dramatically increase in value. However, you should be wary of these promotions.

These false statements may be about any company but micro-cap stocks may be particularly vulnerable. Microcap stocks are typically low-priced stocks issued by very small companies. There is often limited publicly-available information about these companies which makes it easier to spread false information then profit at the expense of unsuspecting investors.

To read the full SEC investor alert, click here. The SEC urges investors to be wary of these promotions and to be aware of the substantial potential for fraud.

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