The Alabama Securities Commission issued an emergency cease-and-desist order Friday against a man it said tried to defraud Alabamians with false promises of lofty returns on stocks whose prices have fluctuated due to the coronavirus, the agency said.
Johnnie Dancy ran an investment scheme on Craigslist promising $5,000 in weekly profits to investors. Neither he nor the stocks he was touting were registered with the Alabama Securities Commission, prompting the agency to issue the cease-and-desist order halting transactions involving Alabamians.
Dancy was involved in a scheme that cherry picks penny stocks that skyrocket without revealing that most penny stocks become worthless. He promised between 400 percent and 1000 percent returns, “a claim investment professionals know is blatantly absurd,” the commission said.
“The worldwide internet is teeming with claims of grandiose profits to be made by capitalizing on public fear about the Coronavirus (COVID-19),” said ASC Director Joseph P. Borg. “There is nothing about the pandemic that changes the risk always present when making investment decisions. If anything, claims by individuals that they can predict the future of this disease and how it will impact markets should cause potential investors to run, not walk, away from these types of advertisements and offers.”
Borg advises to always ask those selling securities if they are registered with the Alabama Securities Commission and to call and verify that they are.
