Pump & Dump Scams: What You Should Know Review Of This Manipulative Practice
Introduction To Pump & Dump Scams
● Such type of scams involve persuading investors to purchase shares with the sole intent to boost, or rather, pump up their value and cost through such artificial means. ● Once this happens, the promoters quickly make a sale of the attractive stocks at sky-high prices.
Are Such Scams Illegal?
Yes, such type of fraudulent activities are illegal since these lead to the manipulation of stocks of companies with minor market capitalization. The fraudster who sells off the shares at the right time gets to profit while new investors end up on the losing side because prices start to fall almost immediately.
How Do Pump & Dump Scammers Contact Investors?
● Cold Calls ● Spam Emails ● Spam Texts
Their Modus Operandi
Such scammers operate on a large scale to defraud new investors. They offer fake, misleading brochures and press releases to convince investors that the opportunity is a highly lucrative one. They may also claim to have insider information regarding the performance of the stock in question.
How To Avoid Being Defrauded?
● Proceed with caution if you get too many spam emails and texts advertising a particular stock. ● Before investing, always check how long has the organization been in existence. ● Be skeptical of reverse merger companies. ● Check reviews and examine whether the stock is a part of an unregulated stock market. ● Do your research before you decide to invest. ● Don’t click on links found in spam emails.
What To Do If You Are A Victim Of Such Fake Schemes? ● Contact local police authorities. ● If you have been contacted via post by scammers, file a complaint with the United States Postal Service anti-fraud department. ● Get in touch with your local consumer forum and also report these malicious, fake market manipulation practices to the Financial Industry Regulatory Authority.
Thank You!
Reviewed & Presented By: Shashank Tayal Manager, Money 2.0 Conference https://www.money2conf.com/