What exactly is "pump and dump"? Isn't this the GS business model?

Discussion in 'Stocks' started by wilburbear, Jan 25, 2011.

  1. How can some get away with recommending stocks - and then make a profit, while others can't?
  2. Depends on the dump?
  3. LeeD


    First 3 links from seach on google:

    In wikipedia
    In investopedia
    On SEC Web-site
  4. Bob111


    not only theirs, but pretty much everyone on wall st. here is an example :


    how can fundamentals or opinion can change to exact opposite in less than a week? seems to me that if one can convince the judge or whatever that GS did hold the stock before let say upgrade-then technically it is falls into pump and dump scheme.
  5. How this is legal I don't know but promotional newsletters, e-mails, mailers, etc. all carry a required SEC disclaimer. The disclaimer essentially warns you that they are paid to promote the stock, that their promotion is not a promotion or even a recommendation, that their information was all sourced from the company itself, that they and others are holding shares and may liquidate into the buying that their promotion creates, and that their liquidation of shares may drive the price down.

    I received a penny stock promotion today and it has all these elements. The next time you see a stock promotion, read the disclaimer. The blatant manipulation is far worse than I ever would have imagined.

    Google Tim Sykes or Street Sweeper for more info. Both have uncovered a lot of dirt on this type of activity. Tim even bases his trading strategy on it.
  6. We need some legal help. Any lawyers, here?

    How can some recommend stocks and sell 'em, and others can't?
  7. Who says you can't? Not something I would do for moral reasons but obviously that doesn't stop everybody.
  8. I've seen the SEC discipline for "pump and dump."

    But, I don't know why some can do it, and some can't. What's the difference?
  9. The most prevalent pump-and-dump tactic is perfectly legal and masterminded by the insiders known as marketmakers/specialists. They know that decreasing prices will attract sellers and raising prices will attract buyers.
  10. who needs faxes, emails blasts when you can hire 50cent to just tweet some jibberrish about a company and have it soar 200%...


    the SEC looked into it and I believe they found nothing illegal about it. I have not read anything recent so google to find out.
    #10     Jan 26, 2011