The Securities and Exchange Commission on Friday issued an alert warning investors about social media fraudsters.

While acknowledging that Facebook, LinkedIn and the like can be important investing tools, the agency said investors should be on the lookout for scamsters attempting to orchestrate the price of a stock through bogus rumors on social media, as well as on online bulletin boards and in Internet chat rooms.

The agency noted that fraudsters often pretend to be an established source of market information with a name, profile, or handle mimicking a particular company or securities research firm.

The SEC said investors should be on guard for the following red flags:

• Limited history of posts. Be skeptical of information from social media accounts that lack a history of prior postings or sending messages.
 
• Pressure to buy or sell RIGHT NOW. Take the time to research the stock before you invest. Be skeptical of messages urging you to buy a hot stock before you “miss out” or to sell shares of a stock you own before the price goes down after negative news is announced. Be especially wary if the promoter claims the recommendation is based on “inside” or confidential information.
 
• Unsolicited investment information or offers. Exercise extreme caution regarding information provided in new posts on your wall, tweets, direct messages, e-mails or other communications that solicit an investment or provide information about a particular stock if you do not personally know the sender (even if the sender appears connected to someone you know).
 
• Unlicensed sellers. Federal and state securities laws require investment professionals and their firms who offer and sell investments to be licensed or registered. Many fraudulent investment schemes involve unlicensed individuals or unregistered firms. Check license and registration status by searching the SEC’s Investment Adviser Public Disclosure (IAPD) website or the Financial Industry Regulatory Authority’s BrokerCheck website.