View more on these topics

FSA issues stock tips warning


The FSA has issued a warning to investors about the sources of thousand of stock tips that appear daily on internet bulletin boards.


The regulator has been quick to emphasise that the majority of such tips are likely to be genuine in nature.


But it has published an alert on its consumer website pages pointing out that unscrupulous individuals could post false information to take advantage of gullible punters.


The alert says: “There is potential for the unscrupulous to place false or misleading messages in order to make money for themselves”.


“Following such tips blindly can seriously damage your wealth. So the simple message is do not believe everything you read.”


Two kinds of scams specifically dealt with have been dubbed “pumping and dumping” and “trashing and cashing”.


The first involves people using bulletin boards to tout a company&#39s fortunes in the hope of persuading others to buy into the shares helping to raise the price. They then sell their stake in the venture earning a tidy profit in the process.


The second, which is exactly the opposite, involves the posting of false negative news about a company to convince other punters to sell off their shares.


When the stock price falls, the offender scoops them up at a bargain price, fully aware that when the rumours they started are proven false, the value of the stocks will correct themselves.


The warning is the latest of a FSA series aimed at helping the public understand the risks of investing over the internet.

Recommended

Britannic announces double boost

Britannic Assurance has announced pre-tax profits of £154.4bn for 1999.It acquired Britannia Building Society&#39s asset management and life assurance business for £346m last year and says the deal had doubled the group&#39s customer base and funds under management to £19.5bn.Britannic chief executive Brian Shaw says the group is planning to expand its salesforce and says […]

CML says e-commerce will co-operate with existing channels

The Council of Mortgage Lenders is predicting e-commerce and established mortgage distribution channels are set to work hand in hand.The CML is dismissing fears that e-commerce ventures will marginalise traditional distribution channels, claiming the two will cooperate and not compete with each other.The E-Commerce and the Internet report written by John Gilbert says, that even […]

R&SA hits out at merger rumours

Royal & Sun Alliance has hit out at rumours it has been looking to merge, but says it would consider an acquisition in general insurance.R&SA chief executive Bob Mendelsohn said reports it had appointed investment bankers to consider possible suitors were categorically false.Mendelsohn said: “We believe the return on capital invested in a well-managed general […]

Sun Life set for internet drive

Sun Life & Provincial is poised to offer insurance products over the internet and plans to move into on-line banking and share dealing before the end of the year.Sun Life will begin selling health insurance via the web within the next few weeks and follow this with a stakeholder friendly pension suited to internet access.Sun […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment