When trawling around for investments, you always need to keep a look out for possible scams.
Recently this article was printed in the New York Times. It should send a warning signal to most people.
Don’t you get caught investing in something that simply looks too good to be true WITHOUT going through some of our processes like ASSESSING an investment.
NICKEL STOCK HITS $90, SPURS FRENZY AND SUSPENSION
November 8, 2005 — The Securities and Exchange Commission suspended a speculative frenzy in the shares of little-known Cameron International yesterday, after the stock’s price went from 5 cents to more than $90 in one day.
How Cameron’s stock price got above its longtime nickel price level seems puzzling enough.
The Santa-Monica, Calif.-based company’s SEC filings reveal it had barely $14,000 in revenue, two board members, and was seeking to sell even more stock to raise enough money to hire employees and launch a Web site.
According to its Yahoo! Finance profile, Cameron provided a variety of business and Internet-based marketing services. If Cameron raised $192,500, the filings said, it might generate revenues by the second half of next year.
The SEC’s release added that despite a 1,000 percent gain on Oct. 28, there was “no material information about the company [being] made public.”
After the close of trading that day, the company — which reported $4,000 in assets in June — had a market value of $133 million.
The SEC also said it had not received information requested for a spooky 30-1 reverse stock split, Cameron said on Halloween.
No one answered repeated calls to Cameron’s headquarters.
What’s more, running Cameron didn’t appear to be too taxing on Stephen Samuels, Cameron’s founder, who announced a week ago he was stepping down from the chief executive slot, according to SEC filings.
You may have heard of a “Boiler Room” scam. In fact there was a Hollywood move about this very topic, oddly, called Boiler Room.
Typically, a Boiler Room is a call centre full of people calling target investors. They explain that they are a stock-broker from some firm (sometimes the firm name is VERY similar to those that you might know). They go on to explain how they are selling a special deal, maybe shares in a pre-IPO company and would you like to get in early.
Whatever the story they spin, the bottom line is that some people pay – only to find out later that the company is now bankrupt or worse, never existed. And all your investor money is gone.
Never buy a stock or make an investment from one phone call. Always follow your process to determine how much you can afford to place, what is it you’re investing in, etc. Good, simple questions.
“Murray Priestley has 25 years of commercial and asset management experience having served in board, CEO and senior executive positions with a number of global public and private companies.”