Stock Market Scammers Use These Free Tricks.
graph, growth, progress

Stock market scammers are targeting investors for their hard-earned money. From fake stock scams to binary options scam online, scammers try to scam their victims differently. Stock investments have become a significant target as they’re the most legit asset for retail or institutional investors. Many people have invested in the stock market as a part of their retirement plan. Despite the security tools you might have applied, your discretion plays a crucial role in preventing the stock market scam from stealing your money.

Be Critical about any Offer from Brokers

No matter how exciting offers are, always be critical of them, even if they appear to come from popular investment companies. Scammers can fake email and be convincingly appearing through phones or other communication media. They bet on your ignorance to investigate further about their offer. When it comes to email offerings, never click links or shortcuts before you research them. If it comes from familiar providers, you can confirm these offers to their customer services or help desk. Take your time to investigate the offers. You can then take action based on your findings.

Research about the company or Stock Broker

When it comes to stock investment, you need to check the company’s establishment and performance. You can’t invest in a company that doesn’t exist and the ones that are failing. Check their background and business operations to see how they’re doing in the industry with their business. Recognize and comprehend their products or services. You can use the Electronic Data Gathering, Analysis, and Retrieval system(EDGAR) owned by the SEC to check on the financial statements of the company you’re researching. You can also use the system to get comparable information about the financial performance of different companies.

Verify The Name of Salespersons or Stock Brokers

FINRA and SEC keep their online database open so investors can check records of investment advisers, salespeople, or brokers. Some websites also offer reviews on brokers and scam investments. You can check BrokerComplaintAlert(BCA) for blacklisted websites to avoid when investing, and, you can file a complaint on the platform.

stock market

You can verify the name of the salesperson on the system. Check the performance, disciplinary records, certifications, licenses, and other factors. Ensure that he/she is licensed to sell or provide the services offered to you. If you find the name on BCA’s site, you can ignore him/her and reject their offers. To avoid impersonation, you need to re-contact the salesperson through the official number you can find there.

Identify What Stocks You Need to Avoid Stock Market Scam

As an investor, always be clear about what kind of stocks you want to invest in. So many resources and courses help you acknowledge different types of stocks. These would help you identify frauds and alert you with red flags on illegitimate stock investment offers. Check on updates of the stock market scam listed by authority or related community. The majority of stock scam victims are the ones that have inadequate knowledge of how the stock investment works and don’t know what they’re looking for.

Beware of Social Marketing

By spending a lot of time on social media forums, your exposure to various frauds through social marketing increases. Many people become scam victims through social media platforms they use. Whether it’s using a business page, social media group, the on-site marketplace, or even private message, scammers can be so convincing. They may also use fake accounts to elevate their exposure on social media platforms. Be careful of any offer coming from your inbox or instant messenger.

Identify Red Flags

Scams or frauds of stock investments come with red flags or signs you can recognize. These include particular marketing techniques or modes to convince investors. There are diverse scam methods in stock investment, but you can find some common red flags below for your reference, let’s check them out.

Stock investment frauds typically come with exaggerated claims, especially about how big profits you can gain if you invest in that particular stock. Reputable stock brokerage won’t offer such exaggerated claims as they would disclose balanced information about the stock market loss and gain to their clients. Make some comparison on yields of popular stocks.

If a stock investment comes with a pyramid or Ponzi scheme, then it’s undoubtedly a stock market scam. You might never own stock with this kind of scheme. Stock investment is about buying shares of a company, and it has nothing to do with pyramid schemes.

Next, you should beware of brokers or investment offers that guarantee a high return. Generally speaking, a completely safe investment never provides you with instant, enormous profit. The stock brokerage or asset managers would take a long time to manage and develop your portfolio. Guaranteeing a high return isn’t possible in the stock investment industry. It’s always about high-risk methods like binary options investing in stock and similar assets if they do. When you find one, it’s a red flag for you.


Beware of faked credibility and hospitality usually used by stock investment scammers. They may use formal, friendly language or come with elegant but faked logos. Some can even make fake websites or reviews to support their story. Follow our guide above to check the actual credibility of the company or the salesperson. Keep it in your mind.
Like other investment scams, fraudsters would try their best to create FOMO effects on their victims. They would convince them that it’s a limited offer where many people are rushing to buy one. They may apply pressure to drive you to invest as soon as possible by limiting the buying time and quantity. Whenever you notice an investment offer doesn’t have adequate technical explanations or descriptions about the stock itself, it’s a red flag for you.

The classical method of investment seminars does also exist in the stock industry. They try to lure and trap you with a humble-look presentation with an arranged setting, typically enriched with lunch or dinner. You’d get a set of meals and materials, but they would be pressing you at the end of the session to make a quick investment decision. If you’re interested in the stock offers, don’t get bothered with pressure. Get back home, do your research on the material and the company to make a solid decision.

If you will like to learn about how to recover from scam, visit

You may also like How to Recover From Investment Fraud