The National Association of Securities Dealers is warning investors to be wary of faxes, emails and even cell phone text messages touting low-priced “China” stocks of companies that often have no affiliation with China or its stock markets.

A new NASD Investor Alert explains how fraudsters entice investors to purchase bogus stocks that promise exponential price growth. Fraudsters use these efforts to pump up the stock’s price, then sell off their shares, usually leaving investors with a stock valued at much less than when they purchased it.

“The fact that a company has ‘China’ in its name can be misleading, especially since most of the companies being peddled are not even incorporated in China,” said NASD chairman and CEO Mary Schapiro. “The best way to avoid being taken in by a scam is to ignore these unsolicited stock recommendations or at the very least investigate the company and its claims before investing.”

The NASD encourages investors to report these scams by forwarding stock spam emails to spam@nasd.com, where the information will be reviewed for possible investigation. In addition to giving investors detailed advice on how to distinguish stock scams from legitimate opportunities, the Alerts also offers tips on how to make sound decisions and where to go to learn more about a company or stock before investing in it.