26 September 2023

Investors warned of share buying scams

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Canberrans hoping to cash in on investments are being warned by the Australian Securities and Investments Commission (ASIC) of an increase in Initial Public Offering (IPO) scams.

Issuing its warning, ASIC said IPOs are the first shares companies sell to the public, and it has noticed an increase in the number of reports about IPO and pre-IPO investment scams.

“ASIC found that the fake Porsche IPO has coincided with the genuine listing of Porsche, which took place on 29 September 2022 on the Frankfurt Stock Exchange,” ASIC said.

“Porsche shares are generally purchased by investors through licensed financial service providers or directly on the Frankfurt Stock Exchange,” it said.

“If you are buying through another means, it may be a scam.”

ASIC said that investing at the pre-IPO stage could involve significant risks for investors.

It said pre-IPO offerings targeted at the general public – especially those published through ‘spam’ email – were often fraudulent and illegal.

The federal Commission said a company that promoted an IPO in Australia must lodge a prospectus with ASIC.

It said if the company hadn’t done this, the offer may be a scam.

When looking out for scams, ASIC advised investors to check if the bank account details directly match the entity they were investing in and the document contained email addresses that corresponded with relevant corporate email addresses.

Further information about ASIC’s investment scams can be accessed on Moneysmart at this PS News link.

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