USA TODAY MONEY
08/22/96 - 11:29 AM ET
NASD: Investors beware of web stock deals
WASHINGTON - A top Wall Street regulator Thursday urged investors to be wary about hot
stock deals on the Internet and unveiled a program to educate people about potential manipulators
lurking in cyberspace.
"It's absolutely critical for investors to understand that information and messages posted
anonymously online should be viewed with caution and a healthy dose of skepticism," said Mary
Schapiro, president of NASD Regulation Inc., which polices the nation's 510,000 brokers and
5,000 firms.
Under the program, Motley Fool, a forum on America Online known as a haven for rumor
mongering about stocks, agreed to post consumer warnings and will set up an e-mail connection
for investors to complain to NASD Regulation.
CompuServe's Investor Forum and Prodigy's Money Talk Bulletin also posted warning messages.
NASD Regulation is distributing a new brochure, available on its new World Wide Web page, to
caution investors about using the Internet as an investment research tool.
"Investors need to understand that while they might be reading honest conversations, they could
just as easily be looking at the work of a corporate insider, stock promoter or short seller,"
Schapiro said.
Schapiro said the investor education push came after an informal study of online messages showed
promotions of Comparator Systems Corp. and other small stocks traded on the Nasdaq Stock
Market coincided with price and volume movements in the stocks.
In May, the Securities and Exchange Commission filed a fraud lawsuit against California-based
Comparator and three officers, alleging the firm misled investors about its finances and
development of new fingerprint identification technology.
The NASD Regulation can be reached on the Internet at nasdr.com or by calling
1-800-289-9999.
By The Associated Press |
