Former Wells Fargo advisor George Russell Thoreson (CRD# 1264272) has reportedly been barred over his role in an alleged pump and dump scheme.
The Securities and Exchange Commission claims that, from April 2012 and September 2013, Thoreson and others participated in a scheme to manipulate the reported share price and volume of a penny stock.
The scam reportedly involved placing trades at above-market prices near the end of trading days to achieve a reported closing price of at least $2 for 90 consecutive trading days.
So far, two customers have filed FINRA arbitrations regarding allegations that Thoreson made unsuitable investment recommendations to them. Both cases are currently pending.
Thoreson was registered with Wells Fargo Advisors LLC from May 2009 through November 2013. Before joining Wells Fargo, Thoreson worked for Morgan Stanley & Co. Inc. Thoreson was fired from Wells Fargo in 2013 and permanently barred by the SEC on Sept. 15, 2017.
What Is a Pump and Dump Scam?
Pump and dump investment scams often involve a scammer who buys up a cheap penny stock and encourages others to get excited about the stock and purchase shares. When a large number of investors start buying up the stock, the price starts to rise.
The scammer then uses this price increase to “pump” the stock price even further by convincing others that it is a high-performing stock. Sometimes the scammer will even create false press releases or quote fake experts to suggest credibility.
Eventually, the scammer will “dump” the shares for a hefty profit before the stock price plummets. The victims of the scam are left with stock that is worth far less than what they paid, and may cause them to suffer significant losses, depending on how much money they invested in the penny stock.
Tips to Avoid Pump and Dump Schemes
Perpetrators of investment fraud can be extremely persuasive. Even if you believe the investment advisor is trustworthy, it is always wise to do your research before you invest your money. The following tips will help you avoid becoming a victim of investment fraud:
- Beware of strangers who tout knowledge about an upcoming announcement regarding a product or company
- Think twice before following any investment tips or other offers you find online
- Don’t get fooled by “limited-time” offers
- Be wary of people who use high-pressure sales tactics
- Before purchasing a stock, make sure it trades on a national exchange
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If you believe you were duped by a pump and dump scammer, contact Meyer Wilson to learn more about any legal options that may be available to you. Meyer Wilson attorneys have helped many investment fraud victims recover their losses. Contact us today for a free consultation.
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