Pump-and-Dump Schemes

Pump-and-dump is an illegal scheme to boost a stock’s or security’s price based on false, misleading, or greatly exaggerated statements, thus the fraudulent practice by the con men of encouraging (most of the time) inexperienced investors to buy shares in a company in order to inflate the price artificially, and then selling their’s own shares while the price is high. After voluminous selling and the hype wearing off, the share price dips sharply, leaving many investors in heavy loss.

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