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If You're Thinking of Investing . . .


In the last year, dozens of companies have gone public over the Internet, making initial stock offerings through their own Web sites or sites built by stock promoters.

But investing in such companies can be risky, securities experts caution, because many are start-ups with little or no track record. Others are out-and-out scams.

"The Net has the potential to allow issuers to reach far more investors at far lower costs and in a far more effective way than in the past," said Securities and Exchange Commissioner Steven Wallman. "It also lets people engaging in fraud reach far more people far more effectively than in the past. Our job is to make sure the Net isn't overrun with bad characters."

Consumers should be alert to telltale signs of online investment fraud, including promises of quick profits, according to the SEC and other securities experts. Other things to do:

* Download and print out a company's prospectus or any other online solicitation you are considering.

* Understand that stock in companies raising money through Registration A or SCOR (Small Corporate Offering Registration) filings isn't traded on public exchanges and can be sold only through a trading board the issuer establishes or if the company does a public stock offering on a major exchange at a later date.

* Check on a company's Web site to see if it's registered to sell securities in your state; if it's not, or if you have other questions, contact the SEC's Internet Fraud Hotline at (202) 942-4647 or the North American Securities Administrators Assn. at (202) 737-0900.

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