The U.S. Securities Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) recently issued an alert cautioning investors to be wary of investment scams arising out of the catastrophic BP oil spill that began in April 2010.
“The staff of the Securities and Exchange Commission and FINRA are issuing this alert to warn investors about potential scams that exploit the Gulf oil spill and related cleanup efforts. While some of the companies touting their role in the cleanup may be legitimate, others could be bogus operations that are only looking to clean out unsuspecting investors.” [SEC Commission Announcement, Issue 2010-98, May 27, 2010.]
The SEC staff further indicates it suspended trading shares of ACT Clean Technologies, Inc. (“ACT”), in Huntington Beach, California. The SEC questioned the accuracy and adequacy of ACT’s disseminated information concerning oil fluidizer cleanup technology purportedly licensed to ACT’s subsidiary and results of field test results for effectiveness of such technology.
Unfortunately, we have seen this investment scam scenario in the wakes of previous disasters, particularly following earthquake and tornado damage. Companies or contractors marketing their supposedly dependable cleanup and restoration services take unsuspecting, and usually desperate, investors’ money, and run without executing the company’s end of the bargain. To help investors put their money toward legitimate cleanup efforts, which are critical to fund the multi-million dollar costs mounting as a result of the Gulf Oil Spill, the SEC and FINRA encourage people to look for the following in order to help them spot potential oil spill stock scams:
The SEC and FINRA also offer these tips to help investors investigate potential oil spill scams:
This advice from the regulators is useful not only for pre-screening possibly bogus oil spill investments, but for anyone looking to exercise prudence before investing their money. The SEC encourages those who are suspicious about a potential investment to visit the following websites to inquire with its Office of Investor Education and Advocacy at www.sec.gov/complaints.html or with FINRA’s Complaint Center at www.finra.org/complaint. As the saying goes, it’s better to be safe than sorry.
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