The “pump and dump” investment scam can be tricky for investors looking to get in on a good opportunity. The financial fraudsters who are responsible for this kind of investment fraud know exactly how to manipulate innocent investors and make an investment seem like a great deal going fast. Sometimes even the company responsible for the stocks used in the scam is completely unaware that fraud is going on until it’s too late—and ends up suffering for it. We believe understanding how financial fraud works is a big step in learning how to avoid it.
In order to avoid a “pump and dump” investment scam, you should always:
This type of investment fraud is very effective because it really seems like you're getting results. Investors can watch the stock prices rise, and may spread the word about their excellent investment choice. The companies are often completely legitimate, so even investors who research the investment may not realize what is happening until it is too late. The prices start to fall so quickly once the fraudsters pull out, that honest investors just don't have time to react.
If you have been taken advantage of through stockbroker misconduct, stock scams, or a "pump and dump" scheme, talk to one of the respected securities fraud attorneys with Meyer Wilson. We have over 50 years of collective experience helping victims of stock scams recover their losses through FINRA arbitration, mediation, and litigation. Give us a call for a FREE consultation.