In an investor alert issued on July 25, 2014, the Securities and Exchange Commission issued a warning about how to recognize stock manipulators who attempt to influence the price of a stock by issuing false information using social media. The alert emphasized how easily and quickly false information can be spread by market manipulators who may be posing as legitimate or trusted sources of information. Plan sponsors may want to communicate this information to their 401(k) plan participants.
The SEC recommends that investors try and verify the identity of a source when receiving investment information via social media. Tips that may indicate information is not legitimate include: slight variations or typos in the senders account name, profile, email address, screen name, or handle. In addition, the SEC advises that when contacting a company or attempting to access its website, be sure to use the contact information or website address supplied by the company itself.
