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SEC warns investors of Ebola stock scams

The Securities and Exchange Commission (SEC) is warning investors that fraudulent companies could be popping up touting Ebola treatments.

The financial regulator suspended trading in four small companies that touted Ebola treatments as part of their business on Thursday. The regulator said there were questions about the accuracy and availability of public information about the companies, especially when it comes to their Ebola-related products.

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The SEC said the emergence of shady companies relying on Ebola treatments for purported profits is simply the latest in a trend of fraudsters seizing on the news of the day to dupe investors.

“Fraudsters are constantly exploiting issues of public concern to tout a penny stock company supposedly in the business of addressing the latest crisis,” said Elisha Frank, co-chairwoman of the SEC’s enforcement division devoted to microcap fraud.

In addition to suspending trading in those companies, the SEC issued an investor alert cautioning against rash investments in opaque companies tied to hot topics like Ebola.

Frequently, scam artists try to entice investors to a company to pump up its stock price, only to dump their shares, leaving regular investors with worthless stock in a fraudulent company.