investing guide

Pump-and-Dump Scam

pump and dump scam

The good ol' "Boiler Room" movie again. Have you rented it yet since I have plugged it a few times already?

Anyway, a pump-and-dump scam simply means someone is trying to pump up the price of a low-priced penny stock usually by sending out emails, letters, or cold calling people.

After the priced gets pumped up by the unsuspecting buyers the pump-and-dump scammers sell all of their shares, and leave the unsuspecting buyers out to dry with basically worthless shares.

So just remember to use common sense and do NOT buy into the hype of any email, phone call, or letter that says you can get rich with a cheap penny stock or any stock for that matter.