Call Now For a Free Consultation:
(614) 532-4576
Nationwide Representation

Beware of Pump-and-Dump Schemes

Last week, our team posted a blog regarding a pump-and-dump scheme involving Jammin’ Java. The alleged scheme resulted in charges brought down by the Securities and Exchange Commission (SEC) against Jammin’ Java’s former CEO, Shane Whittle, who was accused of secretly gaining control of millions of shares in the company’s stocks then spreading them to three offshore entities. According to the allegations, the stocks were later dumped on the public as soon as the prices increased following fraudulent campaign promotions.

FINRA has since provided tips to help investors understand the signs of a pump-and-dump and avoid becoming a victims. These tips can be beneficial in your future investments.

According to FINRA, investors should do the following:

  • Be aware of the source. Understand the company and be aware of fraudulent press releases or promotional material. If you notice a company promoting only upside and do not mention the potential risks, this could be a red flag.
  • Do your research. Looking into the owner of the company, who is in control, and who else may be involved. A quick search may give you the answers you need to proceed with caution. In the case of the Jammin’ Java scheme, two of the involved individuals had previous SEC charges.
  • Look out for reverse mergers. This may be a sign of pump-and-dump schemes because it allows private companies to merge with public shell companies.
  • Understand the trading process. Where does the stock trade? Many of the pump-and-dump schemes people encounter have involved low-priced and thinly traded stocks. These are often not on the New York Stock Exchange, The NASDAQ Stock Market, or other registered securities exchanges.
  • Analyze SEC filings. A large majority of public companies submit SEC filings. Some companies do not because their stocks are traded in an over-the-counter market. Checking this database will help verify if a legitimate company is handling the stocks.

At Meyer Wilson, we are well aware of the situations behind pump-and-dump schemes. We want to protect investors from losses due to this fraudulent behavior. If you have lost money due to a pump and dump, call our securities fraud attorneys today for your free case evaluation and learn how we may be able to help you.

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

Share This Story
If you found the information provided by this article useful, consider sharing to your social media channels to help others in their search for reliable resources.
Consult with Our Legal Team
There is never a cost associated with a consultation
Atlanta Office

945 East Paces Ferry Road, Suite 2275
Atlanta, GA 30326
Columbus Office

305 W. Nationwide Blvd
Columbus, OH 43215
Meyer Wilson
New Orleans Office

900 Camp Street 
Suite 337
New Orleans, LA 70130
Los Angeles Office

2029 Century Park East,
Suite 400N
Los Angeles, CA 90067
Cleveland Office

4781 Richmond Rd.
Suite 400
Warrensville Heights, OH 44128
Bloomfield Hills Office

41000 Woodward Ave.,
Suite 350
Bloomfield Hills, MI 48304
Quick Links
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients of content from this site, clients or otherwise, should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. Read More
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter.
Read More
chevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram