Promoters have become innovative in promoting stock they are paid to promote. "Free Stock" offerings have made their way onto the internet. What is a "free stock" offering? Promoters give away free stock to investors without requiring payment. However in some cases, the promoters are getting a benefit from the investor. According to a press release of the Securities and Exchange Commission (SEC), the problem with these offerings is that investors are not receiving full and fair disclosure as required.

The SEC stated that the benefits that an issuer of free gets in exchange for the issuance of free stock includes:

• Requiring the investor to register with the issuer's website and disclose personal information to the issuer.

• For additional shares, investors are asked to solicit additional investors or link their personal sites to the issuer's sites.

In some cases websites of the issuer's had made false claims about the stock and the company. Some of these companies had not been incorporated and did not have any employees or offices. Some of these stock offerings have not been properly registered with the SEC.

If you see or offered any free stock, ask yourself what the issuer will get in exchange. More importantly, contact the SEC or relevant securities commission in your country. Finally submit a Complaint at our Complaint Centre to warn others.