Penny stock companies are often highly overleveraged small-cap or micro-cap companies headed for bankruptcy. These stocks trade for less than $5 per share on the Pink Sheets or FINRA’s OTC Bulletin Board.
It’s difficult to find any information, let alone credible information, for these types of stocks, which makes it hard to perform due diligence of any sort to understand if the company will survive, let alone thrive. Penny stock scams, such as pump-and-dump-schemes and reverse mergers, are also extremely common and often target inexperienced investors.
If you’ve fallen victim to a penny stock or microcap scheme, or suffered losses due to your broker’s negligence, you may be able to recover. Contact a trusted investment fraud attorney who can review your case and advise on next steps.
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