Investors Alert On Stock Picks Published In Investment Research Websites


Sunday, July 29, 2018    09.38AM / The US SEC’s Office of Investor Education and Advocacy / TheAnalyst 

Being an adaptation by TheAnalyst of a US SEC’s IEA article titled: BEWARE OF STOCK RECOMMENDATIONS ON INVESTMENT RESEARCH WEBSITES  04/10/2017. Picture source however is from the Parent Voice

This Investor Alert has been issued as a guide/warning to investors that seemingly independent commentary on investment research and news websites may in fact be part of paid stock promotion campaign. The Office of Investor Education and Advocacy has provided this information as a service to investors.  It is neither a legal interpretation nor a statement of SEC policy. 

Guidance Issued

When you read an article on an investment research website, be aware that the article may not be objective and independent.  For example, the writer may have been paid directly or indirectly by a company to promote that company’s stock. 

In some cases, the writer may not disclose compensation received or may go so far as to claim falsely that compensation was not received.  Keep in mind that fraudsters may generate articles promoting a company’s stock to drive up the stock price and to profit at your expense.

Stock promotion schemes also may be conducted through social media, investment newsletters, online advertisements, email, internet chat rooms, direct mail, newspapers, magazines, television, and radio.  Be wary if you receive communications (including new posts, tweets, text & WhatsApp messages, or emails) promoting a stock from someone you do not know, even if the sender appears connected to someone you know.  If a company’s stock is promoted more heavily than its products or services, this may be a red flag of investment fraud.

Microcap stocks, some of which are penny stocks and/or nanocap stocks, may be particularly susceptible to stock promotion schemes and other forms of market manipulation. 

SEC Enforcement Actions -  The SEC has taken enforcement action against companies and individuals for generating deceptive articles on investment research websites (we could not find evidence of this in Nigeria, especially given the lessons of 2006-2009). 

The US SEC recently charged 27 parties – including public companies, firms, and writers – with fraud for generating articles that promoted certain stocks when some or all of the writers allegedly:       

  • Failed to disclose that they received payment, even though they had been paid directly or indirectly by the companies;
  • Used different pseudonyms to publish multiple articles that promoted the same stock; and/or
  • Used fake credentials (for example, misrepresenting that the writer was an accountant, fund manager, or research analyst who had certain academic degrees).
  • Additionally, the SEC alleged that some writers engaged in scalping (recommending a stock to drive up the stock price and then selling shares of the stock at inflated prices to generate profits). 
    Even if articles on an investment research website appear to be an unbiased source of information or provide commentary on multiple stocks, they may be part of an undisclosed paid stock promotion.  Never make an investment based solely on information published on an investment research website. 

    Before investing in a particular stock, research the company thoroughly and make sure you understand its business.  As with any investment decision, carefully review all of the materials available to you and if possible, verify what you are told about the investment. 

    Proshare Nigeria Pvt. Ltd.

    What We Have Done At Proshare

    At, stock picks published on our site are done without any compensation and are indeed researched, authored, produced and made available for publishing by licensed fund managers under an service level agreement (SLA). As part of our editorial policy, we emphasize a conscious best effort to disclose paid-for information on the platform such as news (marked as press release), commentary, coverage report or review where the subject entity is a paying client for related or unrelated services; whether commercial or CSR.

    You can spot these disclosures in the following ways:

         In all news post, we disclose along with the date (beneath the title); the originating        source(s) indicating specifically the name of the firm/author and nature of piece.
         Look out for these additional tags - Guest Post, Op-Ed, Sponsored Post, Partner.
         We generally have signed advert agreements (for In-News and banners) which excludes the analyst function’s independence.
         We disclose listed entities we have worked for and work with in our corporate profile. 


    To learn more about this and about red flags of fraud (follow our Frauds & Scandals  page) and for other risks to consider before investing in stocks, (contact our Investor Relations Services via or/and Share support services team via or simply call  0700 – PROSHARE. Our contact details are: Proshare Nigeria, The Upper Room, Plot 590b, Lekan Asuni Close, Omole Phase 2, Isheri LG, Lagos. P. O. Box 18782, Ikeja, Lagos State. General E-mail:

    Proshare Nigeria Pvt. Ltd.

    If you have questions concerning the meaning or application of a particular law or rule, please consult with your fund manager or an attorney who specializes in securities law. 

    Additionally you can contact the following entities about the background of a company or fund manager, including registration or license status of anyone involved in recommending or selling an investment; viz: 

    1.       Contact Us - The Securities and Exchange Commission, Nigeria

    2.      Office Locations – SEC Nigeria Complaints Centre

    3.      Contact Us - Nigerian Stock Exchange

    4.      Contact Us - Central Bank of Nigeria

    5.      Contact Us - Naicom

    6.      Contact Us | National Pension Commission

    7.      Complaint | National Pension Commission

    8.     Contact Us – CIS Nigeria

    9.      Contact Us - AIPM - The Association of Investment Advisers & Portfolio ...

    10.  Contact Us - CIBN

    11.   Contact ICAN | ICAN

    12.  Investments & Securities Tribunal: IST

    13.  Proshare REGULATOR Portal

    Proshare Nigeria Pvt. Ltd.

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