"Wrong Numbers" and Stock Tips on Your Answering Machine
You come home after a long, honest day's work, stroll by your message machine, and see the light blinking. Did a loved one call with good news? Is there a friend calling to find out what you're doing tomorrow? Some people are finding that they have instead received a "misdialed" call from a stranger, leaving a "hot" investment tip for a friend. The message is designed to sound as if the speaker didn't realize that he or she was leaving the hot tip on the wrong machine. Maybe the message sounds like this:
If you get a message like this, it's not a wrong number at all. Instead, it is from someone who is being paid to leave these messages on a whole lot of answering machines. The people paying for this message to go out on hundreds or thousands of answering machines own some of this stock. They are hoping you can be tricked into buying some too, as they stand to gain by selling their shares if the stock price rises because gullible investors buy. Once these fraudsters sell their shares and stop hyping the stock, the price typically falls and investors lose their money. Fraudsters frequently use this ploy with small, thinly-traded companies because it's easier to manipulate a stock when there's little or no information available about the company.
These scams have also migrated to email and faxes. Be extremely wary of an email message that starts out like this:
And look out for a fax transmission that says, "Will you please put your cell phone on. I have been trying to get you for 2 hours. I have a stock for you that will triple in price just like the last stock I gave you did. I can't get you on either phone. Either call me, or call Linda to place the new trade. We need to buy now. P.S. You better be good to me this Christmas. No other Stock Broker has given you back to back wins. Thanks, your shining star Financial Planner."
It is never a good idea to put your hard-earned money into a stock on the basis of a hot tip from somebody you don't know. There are unscrupulous individuals out there who have a financial stake in trying to drive up the price of companies that you've likely never heard of. Many fraudsters rely on Internet chat room sites or spammed investment newsletters to promote companies, but at the SEC we're beginning to hear more and more reports of the phony misdialed number and misdirected email scams.
So what should you do if you get one of these messages? Before you delete the phone message, trash the email, or rip up the fax, we would appreciate hearing details about the stock being hyped. Be sure to tell us the phone number from which the call came (if you're able to tell us), forward the email (including the header information), or send us a copy of the fax. This kind of information is invaluable as we seek to enforce the federal securities laws. You can use our on-line complaint form, at http://www.sec.gov/complaint.shtml, e-mail us at email@example.com, send us a fax at 202-772-9295, or you can call us at 1-800-SEC-0330. We welcome your help in ferreting out fraud in securities sales.
After you send us the information, we suggest you delete the phone message or email. Then congratulate yourself for not falling victim to this kind of scam!
Here's a list of red flags that we often find in many of the frauds that we see:
For more information, please read: