A StockHouse Investor Awareness Special Report: 9 Red Flags to Help Identify Online Message Board Scammers
Hong Kong, June 15 /SHfn/
The continued explosive growth of online message boards can often victimize the novice investor. Notorious posters cloaked in the anonymity of a chat forum can easily deceive many first-time visitors to message boards.
So StockHouse Media Corporation, owner and operator of the Internet's first syndicated financial message forums, the BullBoards? has identified 9 Red Flags that may help prevent being misled. Who is the name behind the message you are reading? In many cases, you will never know. Dishonest posters can fool even the "respectable" message boards. One leading message board claims their registration fee eliminates such dirty tricks, but many stock manipulators get around this by sending in money orders, instead of surrendering their credit card numbers.
The checklist below offers some of the ways you can spot manipulative posters. The list is more of a rating system than absolute con-artist detection list. The greater the number of violations by a poster, the more likely he or she is promoting the stock for some ulterior motive. StockHouse has also introduced a "VOICE YOUR OPINION" module, found in the username's profile. Just click on the User Name. When the profile appears, click the "Voice Your Opinion" line and type in your message about a suspected scammer. This message will appear in the users' profile for everyone to read.
By the way, not all fraudulent posters are bullish - some post to drive shares in the stock lower either with a vendetta or to profit by short selling.
THE RED FLAG CHECKLIST
1. Someone who excessively posts on only one stock.
During the promotional run of that stock, the user may be posting between 8 and 20 messages daily (sometimes more). The user will promote for only so long until he has exercised the stock options that he has been paid to promote the stock or until his cash contract with the company expires.
2. Someone who uses multiple identities.
This is hard to detect. Generally, the poster will run with one identity until he has become despised on the message boards. Then, he will register again with a new identity. If one carefully studies such an individual, it will be found that he posts repeatedly about the same set of stocks, or just one stock. He will post during the same time each day or night. His messages will commonly be the same length. His writing style will be similar and he will use the same phrases or key words in his messages.
3. Someone who repeatedly attacks others on a stock's message boards.
This goes beyond the simple heated debate with one or two members who disagree. If you carefully read his messages, this user will sound like he is fighting for his life --with nearly everyone who challenges him.
4. Someone who emerges as the stock's moderator, or even the leader of the discussion group on that stock.
This person is different from someone who has a genuine fundamental understanding of the company and who is also helpful. A promoter/leader will diligently answer to virtually every negative comment made on "his" message board. He will also cheerlead every positive comment and constantly make an appearance on the message board to "show" he is still the boss.
5. Look for the poster, with a short history in their member profile, who suddenly shows up during a stock run-up, and appears to know "all about" the company.
This person is different from the excited investor, who just bought shares in the company and is enthusiastic about it. The kind of poster hints at "inside information" and quickly name-drops some connection to a company insider or employee. While the "excited" investor may rave about something an investor relations employee told him, the imposter hints at important, but as of yet unannounced, development(s) that may impact the stock price.
6. Someone who is nearly always the first to respond to company developments.
Occasionally, someone else will beat him to it. Otherwise, he's first or a close second almost every time. Commonly, he will positively spin the news, to soften the blow of less than good news or to make good news appear better than it actually is.
7. Someone who continuously hints at upcoming company developments, unreleased company news and unannounced contracts.
Where did he get his information? Usually, he is the one who starts the rumor and might often state that he heard it from someone else. Yes, he did - a company insider. This is where the old clich?(Buy on the rumor; sell on the news) comes from: the company insider who leaked the news.
8. Someone who strongly supports the company during the run-up and then "changes" his mind and begins attacking the company, the company insiders and the project.
This individual is different from the enthused investor who realized he was just scammed. That person is less controlled in his emotions, which is evident in what they write in their postings. While this type of potential scammer carefully controls his statements, both up the chart and back down. On the way up, he may help the stock move higher by adding to the cheerleading, so that he can build a substantial short position. Once he changes his mind, it stays changed, though. The "excited" investor is confused and sounds it, when you read his messages. The latter hasn't the slightest doubts about his position on the company.
9. Someone who goes out of their way to find bad news about the company and makes a "case" out of it.
These individuals might include ex-friends, ex-family (divorced) and ex-employees. Such people don't just post a single negative item. These individuals either take one negative news angle and make it look like "the sky is falling" or they continuously bring it up. That an individual makes frequent appearances to express their anger is the clue, which gives them away. Disgruntled investors usually move on and don't want to be reminded of their bad investment. The above 9 Red Flags are by no means a complete list of warnings signs and should only be used as guidelines to protect yourself from fraudulent messages and posters.
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