• Which companies file reports with the SEC?
• How do I get information about companies?
• What are the “red flags”?
• What about bankruptcy?
• Where can I go for help?

Information is the investor’s best tool when it comes to investing wisely. But accurate information about the smallest of companies can be extremely difficult to find. Many of these very small companies do not register their securities or file financial reports with the SEC, which makes it almost impossible for investors to get the facts about the company’s management, products, services, and finances.

Far too often, the lack of reliable, readily available, current information also opens the door to fraud. It’s much easier for the unscrupulous to spread false information and to manipulate a stock’s price when accurate information about the company is scarce. All it takes for a fraudster to make a killing is a handful of unwary investors who believed what they saw in spam emails, unsolicited faxes, chat room or bulletin board postings, newsletters, or questionable press releases.

The mere fact that a company files reports with the SEC does not make the company a “good” investment or immune to fraud. Conversely, the fact that a company does not file reports with the SEC does not mean the company lacks legitimacy. Many of the companies that don’t file reports with the SEC are honest businesses with real products or services. The critical difference is the extra measure of risk you assume when you invest in a company about which little or no information is publicly available.

This publication describes the information you should review before you invest, provides tips on how to find information about companies, and lists several “red flags” to avoid.