State securities regulators are warning unsophisticated investors to steer clear of day trading.
Day-trading firms let investors execute quick trades to make money on a stock's momentum. But "chances are much better than fifty-fifty that you'll lose your money," said a spokesman for the North American Securities Administrators Association, the umbrella group for state regulators.
In October, Massachusetts regulators sued two day-trading firms, claiming misrepresentation and violation of state securities law. Other states are investigating similar firms, the spokesman said.
The warning came amid other efforts by regulators in recent weeks to curb fraud.