Stock Securities Fraud – Bogus Stock Offerings

A popular vehicle of securities fraud, primarily in the penny stock, private debt offering or IPO (Initial Public Offering) market, are bogus stock offerings. As the name suggests, a bogus stock offering is bogus and is non-existent. Such a bogus stock offering is marketed to investors as a profitable or ‘high yield’ investment, however, the broker or marketer simply takes your money and runs. This type of securities fraud is the easiest for investors to avoid, if they simply use some common sense and spend a little time doing some secondary research. Especially with the internet, this type of research can be easily done by even the most inexperienced investors.

The first warning sign should be a promise of quick, guaranteed high returns or profits.

The second warning sign is if you are unable to verify the stock offering, company or investment opportunity through sources other than the person who brought the investment opportunity to your attention.

The third warning sign is having to put up large sums of money quickly and send it to a PO Box or even overseas.

Although these three signs do not cover all the possible scenarios of a bogus stock offering, it should provide a good warning to avoid most bogus stock offering scams.