Each year, thousands of consumers lose billions of dollars to fraud. Con artists use chat rooms and social media to post “urgent” messages telling people to buy a particular stock. They also use telephones to take advantage of unsuspecting victims. The movies Boiler Room and The Wolf of Wall Street provide valuable insights into how unscrupulous operators steal victims’ money by peddling worthless or nonexistent securities.
So how do you know if an investment is fraudulent? Below are five “red flags”: