FINRA On High Alert For Marijuana Stock Scams

Law360, New York (August 20, 2013, 2:54 PM EDT) -- The Financial Industry Regulatory Authority on Tuesday warned investors about securities fraudsters who tout thinly traded shares of medical marijuana firms, bringing new meaning to the term broker "dealer.”

The financial regulator issued an alert warning investors about pump-and-dump schemes in which con artists lure investors by hyping the stock of thinly traded companies purportedly involved in the medical marijuana business, then selling their own shares at a profit — and leaving investors holding the bag.

The risk is especially great now that almost 20 states...
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