FINRA recently released an investor alert encouraging investors to be extra cautious in investing in Gold related investment products. FINRA notes that current high gold prices have “sparked considerable interest in gold investing, not to mention aggressive marketing and advertising of gold investments, including gold stocks.” To go along with this increase in interest have been increases in risky or fraudulent gold investments, according to FINRA, “some of the stocks and opportunities being promoted have precious little value, and others are outright frauds.”
FINRA is not discouraging investors from gold products all together, but instead “issuing [the] Alert to warn investors about investment scams that promote the latest ‘hot’ gold stock and to provide information on how to invest wisely in gold.”
The alert outlines “warning signs related to gold stocks” as follows:
– “Price targets or predictions of swift and exponential growth”
– “References to being a “buyout target” for other mining companies”
– “Claims that tie stock performance to the general rise in gold prices”
– “Scare tactics such as the threat of inflation or an economic meltdown”
– “Speculative claims based on a new reserve’s proximity to an existing reserve”
– “A change in the company’s name or trading symbol to align it more closely with gold”
FINRA also offers tips to investors to try to avoid scams:
– “Investigate before you invest”
– “Always ask: ‘Why me?’”
– “Read a company’s SEC filings, if available”
FINRA’s Alert has a lot of additional information that any investor should read before investing in gold and the full text can be found at www.FINRA.org.
If you are concerned about investments you have made in gold stocks or other gold-related investment products and would like to speak to a securities attorney, please feel free to call our Chicago office at 312/238-9650.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.