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Gold Fever Sparks New Potential For Investor Fraud

By SHUSTAK REYNOLDS & PARTNERS of Shustak Reynolds & Partners, P.C. posted on Thursday, September 15, 2011.

The price of gold bullion-which recently touched an all-time high-has sparked considerable interest in gold investing and, as with every “hot” investment, has spawned a myriad of aggressive advertising and marketing pitching gold as the “must have” investment. Gold, however, is one of the most cyclical commodities, spiking to new highs during turbulent times and sinking when the economy brightens. Moreover, as a commodity, there are complex issues of whether to take actual delivery of the gold; whether the gold stock fund being touted by a stranger cold calling is a real investment or a scam and what to do with the actual gold. A simple Internet search reveals hundreds of postings by various companies and investors devoted to the topic of investing in gold.

Many of these gold stocks and gold investment opportunities, however, are deceptive and, at worst, outright frauds. Gold is not an investment for the average investor and knowing how to avoid gold stock fraud requires some education and substantial due diligence.

FINRA recently issued an Alert for investors on the warning signs to watch out for to avoid gold stock scams. Anyone thinking of plunging into a gold investment should visit the FINRA web site. Anyone who has been the victim of a gold stock fraud, should contact our firm.

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