| If you've ever thought to yourself "I might buy | | | | brokers are paid under the table to sell the stocks... |
| penny stock online"... hold that thought. There are a | | | | super shady stuff. |
| TON of scams, fraud and spam going on in the wild | | | | Another big one is known as the "pumped and dump" |
| world of stock trading, but more specifically dealing | | | | scheme. The concept is simple and you may have |
| with penny stocks. To give you an idea of how much | | | | heard of it before... it involves misleading statements |
| garbage is being peddled online (as it relates to penny | | | | (typically flat out lies) in an effort to "hype" the |
| stocks), a study done at Oxford found that 15% of | | | | stock (i.e. pump it up). The stocks are then "dumped" |
| ALL spam was related to penny stock fraud. | | | | on the public at inflated prices. This scheme is mainly |
| I'm not here to say "Don't buy penny stock online!"... I | | | | done using the Internet but sometimes you'll get a |
| just want to inform you of some fraud/spam/scams | | | | call from a telemarketer. |
| that are making the rounds at the moment. The | | | | Pump and dump schemes are usually promoted |
| whole key to buying online is finding a credible source | | | | through email spam but you'll also find people doing it |
| of information. Anyway... | | | | on online message boards/forums. The same study |
| One of the biggest fraud schemes going is known as | | | | that found 15% of all spam was related to penny |
| selling "chop stocks". Chop stocks are stocks | | | | stock fraud found that people who responded to the |
| purchased for pennies and then sold for dollars... this | | | | scam lost 8% of their capital/investment in just 2 |
| gives the brokers and stock promoters insane profits | | | | days... meanwhile the spammers would see a return |
| per share. When this kind of stuff happens the | | | | between 4.9% and 6% when they sell. Not cool... |