SEC Says Highflying Marijuana Stocks May Be A Bad Trip
The movement to legalize marijuana has triggered a wave of investment scams by stock dealers promising high returns on dope companies that are likely to be a bad trip.
With nearly half of U.S. states now allowing marijuana use for medical or recreational purposes, the Securities and Exchange Commission is warning "about the potential for fraud in microcap companies that claim their operations relate to the marijuana industry."
"For marijuana-related companies that are not required to report with the SEC, investors may have limited information about the company's management, products, services, and finances," the SEC says. "When publicly available information is scarce, fraudsters can more easily spread false information about a company, making profits for themselves while creating losses for unsuspecting investors."
The SEC, at the time of the announcement in May 2014, had suspended trading in five marijuana companies located in California, Colorado, and Texas.
"Recent changes in state laws concerning medical and recreational marijuana have created new opportunities for penny stock fraud," said Elisha Frank, co-chair of the SEC Enforcement Division's Microcap Fraud Task Force. "Wherever we see incomplete or misleading disclosures, we act quickly to protect investors."
In other words, your expected high profits could go up in smoke.
© 2017. All Rights Reserved.
- Lending Money? Watch Your Tax Step
- Why Aren't More Millennials Moving On Up And Out?
- Are You "Rich" Or Not? New Survey Hits The High Points
- 6 Ways To Close The Retirement Gap
- The myRa Is Cut Short, But Other Options Abound
- Foreign Intrigue In Estate Planning
- This Tax-Free Rollover Goes Right To Charity
- Four Tax Strategies In Retirement
- ETFs Can Provide Some Other-Worldly Benefits To Investors
- Watch Out For "Grandparent Scams"
- How To Spell Estate Tax Relief
- Six Tax Items For Small Businesses
- Do You Deserve A High Grade In Financial Literacy?
- Why Turn Down An Inheritance?
- Q's And A's About Financial Aid