Penny Stock Pump & Dump Schemes

The Pump and Dump is a fraud happens all the time. Promoters drum up interest in a scarcely known or unknown stock. Inexperienced investors buy up the shares, pumping the price. Once the stock has reached a certain inflated price, the bad guys sell or dump, the stock at a huge profit. In turn, investors are left high and dry. These pump-and-dump schemes are often distributed through free penny stock newsletters, where the publisher is paid to list these unpromising and hyped-up stocks. If you get one of these newsletters, read the fine print on its website. You may notice that the companies or promoters are paying the author of the newsletter to feature them.

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