NJ Cannabis Media -
September 9, 2018

SEC issues alert about marijuana investment and fraud

Written by Marc Schwarz
Facebooktwittergoogle_plusredditpinterestlinkedinmail

The Securities and Exchange Commission issued an alert to investors to be wary of investment fraud and market manipulation.

The alert issued on Sept. 5  warned that “scam artists often exploit ‘hot’ industries to trick investors, including by making false promises of high returns with low risks. The SEC’s Office of Investor Education and Advocacy (OIEA) and Retail Strategy Task Force are warning investors about these kinds of investment schemes involving marijuana-related companies.”

In regard to investment fraud, the SEC told investors to watch for these warning signs:

  • Unlicensed, unregistered sellers. Unlicensed, unregistered persons commit many of the securities frauds that target individual, Main Street investors. Check out the background, including registration or license status, of anyone recommending or selling an investment, using the free simple search tool on Investor.gov.
  • Guaranteed returns. If someone promises you a guaranteed high rate of return on your investment, especially along with a claim of no risk, it likely is a fraudulent scheme.
  • Unsolicited offers. If someone reaches out to you through social media, an e-mail, a text, or a phone call regarding an investment “opportunity,” it may be part of a scam.

In regard to market manipulation, particularly of microcap stocks, be alert to the spread of false and misleading information about a stock:

  • Trading suspension. Check whether the SEC has recently suspended trading of the company’s stock.
  • Changes to company name or type of business. Research the company and be skeptical if the company has abruptly changed its name, industry, or business plan multiple times.
  • False press releases. Press releases that seem implausible may indicate that the company’s stock is being hyped solely to drive up its stock price.   

 

OTHER NEWS

Price check: What medical marijuana costs in N.J.

December 3, 2018
Here's a look at prices for medical marijuana at New Jersey's...

Number of the week: 202

August 6, 2018
The number of days as of Aug. 6 that Governor Phil Murphy has been in...

Dept. of Health announces 6 new ATC license winners

December 17, 2018
The six winners of vertically integrated Alternative Treatment Center...

Getting wording right key when dealing with zoning of medical marijuana

February 18, 2019
As more and more municipalities tackle zoning issues regarding...