What is a stock market scam?

A stock market scam involves illegal, deceptive practices aimed at manipulating stock prices or defrauding investors for personal gain, often resulting in significant financial losses for victims.

What are common types of stock market scams?

Common types include pump-and-dump schemes, insider trading, Ponzi schemes, microcap fraud, boiler room operations, and high-yield investment programs (HYIPs).

How can investors protect themselves from stock market scams?

Investors should thoroughly research investments, verify broker credentials, be skeptical of unsolicited offers promising high returns, diversify portfolios, and consult financial advisors.

Which regulatory bodies combat stock market fraud?

In the U.S., the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) are key regulators. Similar bodies exist in other countries, such as the FCA in the UK or ASIC in Australia.