FINRA Sounds Alarm Over Nutraceutical Industry

Law360, New York (May 16, 2012, 5:00 PM EDT) -- The Financial Industry Regulatory Authority cautioned investors Wednesday against putting their money into companies that sell nutraceuticals like weight-loss products and energy drinks, saying such promotions are often the work of “con artists.”

The nongovernmental securities regulator warned in an investor notice that nutraceutical companies are frequently operated as so-called pump-and-dump schemes, in which company heads sell their shares and leave investors holding worthless stock.

“The con artists behind nutraceutical stock scams may try to lure in investors with optimistic and potentially false and misleading information...
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