Hang up on any broker who wants you to buy or sell a security based on inside or private information.
A common scenario we hear about often involves a
situation where a broker solicits his customer to buy a stock
because the company's earnings report will be coming out the next
day, and that the earnings reported will be better than market
expectations, thereby causing the stock's price to rise.
One of two things is happening in this situation. Either the
broker is passing on non-public information, which is illegal,
or the broker doesn't have any special knowledge, which is dishonest.
We have yet to run into a broker who cold
calls strangers with insider information, either way, you
don't want to do business with this broker.
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