That’s right kiddos, “Pump and Dump” is used to describe more than the ageless mating practice enjoyed by alpha males. It’s also used to describe a form of Microcap stock fraud. In both scenarios: people are sold a dream, fucked, and then left standing there with sad looks on their faces.
On Sunday afternoon I was helping my cousin and her husband move when her friend walked up talking about a bunch of crazy text messages she had gotten on her cell phone. Being the ex douche bag that I am, I was singled out to explain what was going on. The messages were written to appear as if they had been sent to the wrong person with a juicy (insider?) tip on a penny stock that was about to skyrocket in price. This is the Pump side of a Pump and Dump. Someone looking to manipulate (*cough* *cough* defraud) the market can artificially inflate a stock by as much as tenfold with relative ease. They simply have to get a ton of people to buy the hell out of it within a short period of time.
How the hardcore guys did this back in the day:
1. Buy a metric assload (literal translation: whole bunch) of any random penny stock.
2. Rent some temporary office space with a bunch of phone lines and set up a telemarketing operation.
3. All the cohorts would sit around calling residential numbers during business hours in hopes of getting answering machines. If someone answered: “Whoops, wrong number”. If they got a machine, they’d lay down one of several scripted voice mails that carried the same message: stock XYZ is going to explode on [whatever date].
Example:
“Hey Jim, Bobby again. It’s a Go on XYZ the 19th of this month. I just dropped 50k into that puppy. Our friend at the FDA said that their cholesterol pill is going to get the green light for sure. We’re in the know ahead of the company, even. This is going to be huge.”
4. After leaving thousands upon thousands of these fake insider tips on people’s answering machines the stock would jump up in price because of all the people buying it based on the bogus tips. Before the magical day when the stock is supposed to skyrocket, the evil evil bad bad people sell (dump) all of theirs for big profits before the stock levels out to its actual worth.
5. The people who bought the stock based on bogus insider tips are left with sad looks on their faces and are reluctant to report anything to law enforcement. No one likes admitting to being suckered. And, it was “illegal insider info” they were acting on - not something you want to tell police about.
Think I’m bullshitting about this not being rocket science? About seven years back a freaking 15 year old kid got fined over 250k by the Securities and Exchange Commission for such stuff. Even after that spanking from the SEC, Jonathan Lebed was sitting on 500k in profits from two years of shady stock manipulating.
Back to this current Pump and Dump hustle…
continue reading "FDKE: Pump and Dump Stock Fraud Currently In Progress"
Yeah, so what? I said that all those evil evil bad bad things could happen to a person while trying to reach the site. I never said that they’d actually make it there. Your good ol’ Uncle Buck or Aunt Charlene who’s not too savvy on that there interweb, but falls perfectly into the demographic of folks who would have a Wally World prepaid money card, is likely to mistype the web address. That’s why any security-minded company who wants to protect their customers and brand’s image would / should at the very least register all of the most common typo domains when setting up shop on a new domain - especially if it’s a financial kinda deal. In Walmart’s infinite wisdom, they did no such thing.
