Call Now For a Free Consultation:
(614) 532-4576
Nationwide Representation

FINRA Issues Warning Against Hot Gold Stock Scams and Gold Investment Schemes

2011 top investor trap, "hot" gold stock scams and gold investments schemes are all over the Internet. Investors still wary of the volatile stock market are lured to invest by aggressive sales tactics, ubiquitous marketing campaigns, and the high price of gold bullion. Unfortunately, according to a recent investor alert issued by FINRA, many of these heavily marketed "great deals" are scams.

"Many gold-related investment scams involve the stocks of gold mining and/or exploration companies," wrote FINRA. "The stock value is often based on gold reserves that are difficult to estimate, much less verify. While stock promoters regularly cite the potential value of a gold reserve, some statements can be deliberately misleading."

Last year, the SEC filed a fraud complaint against Quri Resources, Inc. (Quri), a purported mining company headquartered in Miami, Florida with operations in Ecuador, and its CEO, Jaime Santiago Gomez. The complaint accused Quri and Gomez of issuing "a series of false press releases and other misleading public statements" about Quri's gold mining activities, including the claim that the company "was ready to begin drilling on a mining project in Ecuador with a probable gold reserve worth over $1 billion." In reality, Quri had no money and no expectation of raising the funds necessary to begin the project.

To protect themselves from scams like Quri's, FINRA recommends investors investigate a marketing campaign or sales person's claims before investing in gold products, and check the SEC's EDGAR database for any available information about the company.

FINRA also suggests that investors watch out for the red flags that may signal a gold stock scam, such as:

  • The words "prime buyout target" in promotional materials;
  • "Price targets or predictions of swift and exponential growth;"
  • "Claims that tie stock performance to the general rise in gold prices;" and
  • Assertions that a mine could hold "billions in unrecovered gold," because of a neighboring mine's success.

For additional tips on avoiding gold investment schemes, read FINRA's full alert here.

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

Share This Story
If you found the information provided by this article useful, consider sharing to your social media channels to help others in their search for reliable resources.
Consult with Our Legal Team
There is never a cost associated with a consultation
Atlanta Office

945 East Paces Ferry Road, Suite 2275
Atlanta, GA 30326
Columbus Office

305 W. Nationwide Blvd
Columbus, OH 43215
Meyer Wilson
New Orleans Office

900 Camp Street 
Suite 337
New Orleans, LA 70130
Los Angeles Office

2029 Century Park East,
Suite 400N
Los Angeles, CA 90067
Cleveland Office

4781 Richmond Rd.
Suite 400
Warrensville Heights, OH 44128
Bloomfield Hills Office

41000 Woodward Ave.,
Suite 350
Bloomfield Hills, MI 48304
Quick Links
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients of content from this site, clients or otherwise, should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. Read More
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter.
Read More
chevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram