The U.S. Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy issued an investor alert on Wednesday warning investors about potential investment scams involving companies that claim to be in the business of dealing with the Zika virus.
“Investment scam artists often exploit the latest crisis to line their own pockets and Zika is no exception,” the SEC warns in the alert. Indeed, the regulator reports that its staff is aware of increased stock promotion by companies that claim to be developing products or services relating to the virus.
The SEC says that these promotions may be “pump-and-dump” schemes that involve pumping a stock’s price by touting positive news in an effort to drive up the price, so that fraudsters can dump inflated stock on unsuspecting investors.
“Before investing in a company that claims its products or services relate to the Zika virus, carefully review all information you receive about the investment. For more information about the Zika virus, including vaccine and treatment research, visit the websites of the Centers for Disease Control and Prevention (CDC), National Institute of Allergy and Infectious Diseases (NIAID), National Institutes of Health (NIH), and U.S. Food and Drug Administration (FDA),” the SEC advises.