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

Investors Warned of Scams Conducted Over Messaging Apps

The Financial Industry Regulatory Authority and Meyer Wilson want investors to be aware of the recent popularity of stock scams occurring over messaging apps. Investors should be aware of any unsolicited emails promoting penny stocks. Fraudsters are now targeting victims through messaging apps such as WhatsApp to trap unsuspecting individuals in pump-and-dump schemes.

FINRA has seen recent spikes in spam messages on WhatsApp, where users are encouraged to invest in penny or “microcap” stocks. Microcap stocks are characterized by their low total value of the whole company.

Some things to be aware of microcap stocks: 

  • There is generally little information available to the public about the companies. This makes them more susceptible to fraud.
  • They do not have a minimum for listing standards.
  • Microcap stock companies are generally riskier. These companies tend to be newer, thus lacking the established track record of bigger, wider known stock firms.

If you are working with a broker, advisor, or firm, it might be helpful to ask them for more information about prospective microcap companies.

Scammers are using these microcap companies as a vessel to scam investors. Stockholders were recently solicited to invest in AVRA Inc., through WhatsApp. The fraudsters pretended to be connected to well-established firms. When introducing themselves, they typically only used first names. Finally, these scams offered investors high returns on stocks, claiming they only had a limited number available.

Messaging app scams like these are related to pump-and-dump schemes. These schemes are when stocks are initially sold because of false promises. Because customers buy the stocks so quickly, it pumps their value. The scammers then sell all their stocks at the peak price value. Swiftly thereafter, the prices of the stocks plummet, leaving them to be worthless or very nearly so.

We at Meyer Wilson want you to be well prepared when investing in any form of stocks. This is why we warn you from hastily investing in stocks that seem too good to be true. If you receive unsolicited messages through messaging apps, we recommend that you ignore or delete them. If you would like to know more about your legal rights when it comes to investments, contact our experienced investment fraud attorneys today!

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

614-224-6000
305 W. Nationwide Blvd
Columbus, OH 43215
Meyer Wilson
New Orleans Office

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

310-905-8688
2029 Century Park East,
Suite 400N
Los Angeles, CA 90067
Cleveland Office

216-600-1355
4781 Richmond Rd.
Suite 400
Warrensville Heights, OH 44128
Bloomfield Hills Office

248-817-8214
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