The Financial Industry Regulatory Authority (FINRA) is alerting consumers to watch out for scams purporting to offer investors access to pre-IPO shares of well-known social media companies such as Facebook. They have a detailed investor alert called Pre-IPO Offerings – These Scammers Are Not Your Friends.
Tips from FINRA include:
· avoiding any unsolicited pre-IPO offer – investors should ask themselves, “Why would a total stranger tell me about a really great investment opportunity?”;
· being alert to persuasion tactics – virtually all pre-IPO scams rely on the same recipe for a con: dangling the prospect of exclusive access to eye-popping returns at a discount if you act quickly;
· verifying whether the person touting the stock or investment is licensed;
· determining if you’re being conned by a convicted criminal by using the Federal Bureau of Prisons Inmate Locator;
· using search engines to learn as much as you can about a solicitation and those behind it; and
· getting an unbiased second opinion from a licensed investment professional or an attorney.