In today’s world, the Internet serves as an excellent medium for investors to speedily and inexpensively obtain information and research on investment opportunities. But, unscrupulous persons can use the same medium to provide unwanted investment tips or advice to reap monetary gains at the expense of unsuspecting investors. The following avenues are commonly used to disseminate false investment information:

The main goal of these “crooks” is to disseminate false news and misleading information with the view of obtaining profits for themselves.

Insider information
Usually, conmen will claim that they have inside information on impending development of certain companies, which would have a positive impact on its share price. They try to trick investors into buying or selling the shares quickly before “any major price movement upon official announcement”. Their intention is to make a profit from any price movements from the frantic buying of the shares by “victims” of their claims. Investors should also be aware that even if the inside information is correct, dealing in shares using inside information is an offence under the Securities Industry Act 1983 and could lead to a fine of not less than RM1 million and a jail term of not more than 10 years.

False and misleading information
False messages on the websites regarding shares can be made to look as genuine. Conmen can easily make up fictitious stories or omit certain facts to trick investors. Again, their intention is to create excitement and raise share prices so that they make as much profit as they can. Therefore, don’t believe what you see on the Internet.

Differentiate between fact and fiction
The Internet provides a very flexible platform for individuals and companies to communicate with a large audience at minimal expense, effort and time. Anyone can build a website, post information on bulletin boards, send mass e-mails or enter into a discussion in a chat room. Very often, you will not know the person posting the information on the Internet. While the information may look genuine, it may not be true. Therefore, investors should be cautious and must verify/check the information obtained via the Internet before making any investment decisions.