Resources/ Updates

Apr23

Investor Alert: Beware of Stock Recs on Research Websites

The Office of Investor Education and Advocacy (OIEA) of the Securities and Exchange Commission (SEC) issued an Investor Alert to enlighten investors about the pitfalls of stock recommendations and related research on websites and elsewhere.

“Seemingly independent commentary on investment research websites may in fact be part of paid stock promotion campaigns.” That article on an investment research website may not be objective.  The writer may have been paid to promote a company’s stock and even deny so in print.

The SEC recently charged 27 parties with fraud for promoting stocks where the writer failed to disclose payment, used a pseudonym or faked credentials.

Schemes Can Be Anywhere

Stock promotion schemes might be on social media sites or in the form of newsletters, advertisements, direct mail, email, newspapers, magazines, TV and radio– even texts and tweets.

“If a company’s stock is promoted more heavily than its products or services, this may be a red flag of investment fraud.”  Note that microcap stocks (including penny stocks and nanocap stocks) have a documented history of stock promotion schemes.

What to Do 

  • Never make an investment based solely on information published on an investment research website.
  • Carefully review all investment related materials available to you towards the goal of verifying what is presented as research.
  • Before making an investment: always background check an adviser at IAPD.  And always background check a broker-dealer at FINRA BrokerCheck   

Related Document

For more info and resources read the full Investor Alert: Beware of Stock Recommendations on Investment Research Websites April 10, 2017

About The SDDCO Group

Formed in 1952, The SDDCO Group (www.sddco.com) delivers outsourced professional support to the financial services and technology sectors. Our menu of professional services includes accounting, regulatory and tax compliance, AML testing, brokerage hosting and supervision, as well as assuming designated FinOp, CCO, and CFO roles.

 

FOCUSED SUPPORT

SDDco specializes
in two industries.

Our know-how and our network supports the financial services & tech industries.

We hold the right training and licensures to keep you in step and mitigate risk.

Our Credentials

SUCCESSFUL CLIENTS

SDDco supports
industry leaders.

We oversee back office functions so you can focus on your own clients.

Major banks, private funds, RIAs, BDs, and tech startups choose us.

Our Clients

TOP TALENT

SDDco is as good
as its great people.

Our CPAs, FinOps and
consultants are licensed,
experienced professionals.

Partner with us for start-ups and for ongoing accounting, compliance and tax work.

Our People

ONSITE OUTSOURCING

SDDco performs
services onsite.

Outsourced support with
SDDco isn’t out of sight.

We work in your space and for your team on a regular basis. Engage the expertise without the fulltime hire.

Our Praises

HIGH STANDARDS

SDDco observes
AICPA principles.

Our inaugural firm began
when two CPAs opened
a NYC office back in 1952.

We faithfully maintain the CPA standards: integrity, competency, confidentiality….

Our Group