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SEC Issues an Investor Alert on Social Media and Investing (Part II)

March 15, 2016

SEC v. Craig.

On November 5, 2015, the Securities and Exchange Commission (“SEC”) filed securities charges against James Alan Craig, a 62-year-old Scottish trader.[1] The SEC’s complaint concerns Craig’s use of Twitter accounts to commit securities fraud by making false statements about publicly traded companies in order to manipulate the price of those companies’ exchange-traded securities. Just as the SEC warned in the investor alert of fraudsters who conceal their true identities by mimicking credible sources of market information, the complaint alleges that Craig created the Twitter accounts to mislead the public into believing that tweets issued from those accounts were from established securities research firms. … Read the rest

SEC Issues an Investor Alert on Social Media and Investing (Part I)

March 3, 2016

On November 5, 2015, the Securities and Exchange Commission (“SEC”) issued an investor alert to warn investors about fraudsters who attempt to manipulate share prices through social media.[1] For a full text of the investor alert, click here. With the prevalence of social media and their increasing usage in market research, this seems to be a particularly appropriate topic for an investor alert.

In the investor alert, the SEC warned that, while social media can provide many benefits for investors, such as stock research and up-to-date news, it also presents opportunities for fraudsters to spread false or misleading information about a stock to large numbers of people with minimum effort and at a relatively low cost. … Read the rest

Crowdfunding Gone Wrong: Some Points of Caution SEC Investor Alert: Ascenergy LLC Oil and Gas Crowdfunding Scheme

January 19, 2016

We’ve covered crowdfunding extensively in our previous posts “Crowdfunding: Is It Right for My Business,” “Is It Time To Do Crowdfunding To Raise Money?: SEC Releases Federal Crowdfunding Rules,” and “An Easy Way for Texas Companies To Raise Money? A Discussion of the Texas Crowdfunding Exemption.” As crowdfunding gains popularity, not only has it proved to be a process of trial and error (see, for example, our previous posts “Eureeca: A Cautionary Tale on How Not To Do Crowdfunding” and “Update on Eureeca Capital”), but schemes to defraud unsophisticated investors with the allure of crowdfunding also seem to have been on the rise.… Read the rest

All postings are intended to be planning tools to familiarize readers with some of the high-level issues discussed therein. No posting is intended to be a comprehensive discussion and additional details should be discussed with your transaction planners including attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity.