The SEC has issued an investor alert about fraudulent investment schemes touting solutions to the coronavirus outbreak.
The regulator says it’s learned of several internet promotions that claim products or services of publicly traded companies capable of preventing, detecting or curing the virus, often disguised as research reports.
Such claims, especially when involving microcap stocks, are sometimes made as pump-and-dump schemes, according to the investor alert.
The SEC warns investors that promoters of such schemes drive up the price of the stock by spreading rumors and quickly sell their stock before “before the hype ends.” The regulator suggests that investors carefully research any investment, including anything related to companies behind coronavirus-related products, keeping in mind that fraudsters are prone to exploit the latest crisis.
The coronavirus outbreak, which began in the Chinese province of Wuhan, has caused more than 600 deaths worldwide as of Friday, according to NBC News. At least 12 cases of the coronavirus have been confirmed in the U.S., according to the TV news channel.
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