Pump and Dump 5

OK - back to our thread.

     Look at the first element of "Pump and Dump" again - the target is subjected to a high pressure sales pitch to buy the stock in question that will later be dumped.  How many times have we seen this before?  The target is subjected to intense pressure to "buy NOW NOW NOW" or lose out on the opportunity of a lifetime.

     As has been discussed previously on this blog, so many issues begin when someone is told that they have to buy NOW.  It is extremely unlikely that any reputable securities dealer will ever tell a client that a purchase has to be made immediately.  There are, of course, issues where a stock may be available for the first time because of an Initial Public Offering or some other type of offering that is not normally available.  However, offerings such as these are usually well-publicized or information about them is available through channels that reputable security dealers use.  If someone is telling you that this is "secret" information, something is usually strange.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

                                             

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

 

5 Badass Con Men

I know we are in the middle of a thread, but this is too funny not to post. 

From our friends at Cracked magazine.

Warning - contains some profanity.

http://www.cracked.com/article_20711_5-badass-con-men-who-fooled-experts-there-to-catch-them.html

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

                                             

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

 

Pump and Dump 4

There are really only two elements to the entire "pump and dump" scam.

     The first, as described, is the necessity of the fraudster getting as many people as possible to buy the stock.  This involves the high-pressure "boiler room" tactics of telling potential clients that the stock in question is going to go up or is going up and, in essence, the client would be a fool to miss out on the opportunity.  It involves really nothing more than a high-pressure sales pitch.

     The second element is: once the stock has reached its artificially inflated price, the fraudster now has the "inside knowledge" to know that the stock will soon be losing its value because the stock has been artificially inflated.  At this point, before anyone can really react, the fraudster now knows that he is in the perfect position to sell which, of course, he does.  He sells as much of the stock as possible.  Of course by doing so, he gets an insane profit from the whole thing.

     Once again, we see the high-pressure sales tactics at work. 

   We will discuss how to avoid this fraud in the next series of posts. 

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

                                             

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

 

Pump and Dump 3

OK - so we have seen how the Pump and Dump scam works: a huckster will take a stock (or like investment), advertise it to all potential buyers as the "one to buy" or "you must buy NOW!"  This creates a false sense of confidence about the stock and creates unwarranted attention.  This attention, of course, creates an incentive to purchase the stock in large quantities or encourages many people to purchase the stock.

     In any case, the result is the same: the price of the stock goes up because of the demand.  The price becomes artificially inflated.  A viscous circle develops - the more the word gets out, the more the stock is in demand which of course leads to the price of the stock go up because of the demand..

    Then, after the stock reaches its maximum inflated value (or what is thought to be the maximum value) and the hucksters then sell the stock at the artificially inflated value.  In other words, they get out while the going is good.  Once the people at the top sell the stock, it creates a spiral effect where others sell the stock as well, but at a much lower value.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

                                             

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

 

Pump and Dump 2

Before we begin our exploration of "Pump and Dump," here is another overview of this scheme from Wikipedia:

http://en.wikipedia.org/wiki/Pump_and_dump

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

                                             

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

 

Pump & Dump 1

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.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

                                             

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

 

 

Interesting case in the Northern District

This is an interesting case from the Northern District of Texas.  Not so much because of its content (which is marginally white-collar or fraud), but the fact that the person self-reported.  We will talk about self-reporting in a later thread and how it can reduce penalties and the possibility of criminal prosecution.

http://www.justice.gov/usao/txn/PressRelease/2013/NOV2013/nov27Borger_agreement.html

We will be starting a new thread tomorrow.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

                                             

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk