Email Pump-and-Dump Scams
An article at Consumer Affairs warns that scammers are pulling out an old con to fleece unsuspecting investors. The scam is called the “pump and dump”.
The scammers buy up stocks that are selling for pennies a share. The scammers then send out millions of emails that encourage victims to invest in the company’s stock. The result is that trading in the stock increases, rapidly driving up the share price. When the stock hits a high point, the scammers sell off their shares and the price of the stock falls dramatically. Those who invested on the advice of the email lose money as the stock’s price falls to its original worth.
If someone emails you to give you a good tip, ask yourself how good could it be if they are telling the whole world about it.
By Janus on November 7th, 2006 at 1:59 pm