Tuesday, April 3, 2012

What is "Pump & Dump" stock fraud? ---> Making money by creating a bubble by artificially inflating stock prices and selling them off at the peak, just before the burst - pop! However, it is hard to find this out until AFTER the event!

From the link: http://en.wikipedia.org/wiki/Pump_and_dump

"Pump and dump" is a form of microcap stock fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme "dump" their overvalued shares, the price falls and investors lose their money. Stocks that are the subject of pump-and-dump schemes are sometimes called "chop stocks". While fraudsters in the past relied on cold calls, the Internet now offers a cheaper and easier way of reaching large numbers of potential investors.

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