When you read an article on an investment research website, be aware that it may not be objective and independent.

The SEC recently charged 27 parties – including public companies, firms, and writers – with fraud for generating articles that promoted certain stocks.

Even if articles on an investment research website appear to be an unbiased source of information or provide commentary on multiple stocks, they may be part of an undisclosed paid stock promotion. For example, a company may have paid the writer – directly or indirectly – to promote that company’s stock. In some cases, the writer may not disclose compensation received or may go so far as to claim falsely that they never received compensation. Keep in mind that fraudsters may generate articles promoting a company’s stock to drive up the stock price and to profit at your expense.

Never make an investment based solely on information published on an investment research website. Before investing in a particular stock, research the company thoroughly and make sure you understand its business. As with any investment decision, carefully review all of the materials available to you and if possible, verify what you are told about the investment.

Find the SEC’s full Investor Alert and learn more about saving and investing at Investor.gov, the SEC’s website for individual investors. Members of the military can also find additional resources at the Investor.gov Military page.

The Office of Investor Education and Advocacy has provided this information as a service to investors. It is neither a legal interpretation nor a statement of SEC policy. If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.

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