We will spend the next series of posts focusing on "pump and dump" fraud. This is another classic form of fraud which appears with depressing regularity.
The FBI defines "pump and dump" as follows:
"This scheme—commonly referred to as a “pump and dump”—creates artificial buying pressure for a targeted security, generally a low-trading volume issuer in the over-the-counter securities market largely controlled by the fraud perpetrators. This artificially increased trading volume has the effect of artificially increasing the price of the targeted security (i.e., the “pump”), which is rapidly sold off into the inflated market for the security by the fraud perpetrators (i.e., the “dump”); resulting in illicit gains to the perpetrators and losses to innocent third party investors. Typically, the increased trading volume is generated by inducing unwitting investors to purchase shares of the targeted security through false or deceptive sales practices and/or public information releases."
As stated, we will explore this in the next series of posts.
The FBI defines "pump and dump" as follows:
"This scheme—commonly referred to as a “pump and dump”—creates artificial buying pressure for a targeted security, generally a low-trading volume issuer in the over-the-counter securities market largely controlled by the fraud perpetrators. This artificially increased trading volume has the effect of artificially increasing the price of the targeted security (i.e., the “pump”), which is rapidly sold off into the inflated market for the security by the fraud perpetrators (i.e., the “dump”); resulting in illicit gains to the perpetrators and losses to innocent third party investors. Typically, the increased trading volume is generated by inducing unwitting investors to purchase shares of the targeted security through false or deceptive sales practices and/or public information releases."
As stated, we will explore this in the next series of posts.
NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR
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THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.
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tausk
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