Saturday, 25 October 2014

Avoid the pump and dump scheme

Have you been a victim of the pump and dump scheme? Do you even know what it is? No, huh? 

Well this article will give you the complete details about this entire program. Let us get an insight about it.

What is pump and dump scheme?

This term relates to the disregard of the laws and regulation by any company or investors. When a company artificially exaggerates their stock prices by boosting the misleading or false information about the company and find out easy ways of earning money with illegal and fraud practice it is known as pump and dump scheme.

What are the methods used by schemers of pump and dump program?

·    One of the easiest and most common methods is promoting through message boards. This creates awareness about the stock and waits for the individual who get trapped and buys the bait.

·     Signing up for free newsletters is yet another method or tactic that is used by the pump and dump schemers. Once you provide with e-mail address you will delivered with different reports regarding the stocks of the particular company or investor.

These are the two common and the most popular tactics that are in practice in the pump and dump scheme

Be aware of this illegal scheme

Pump and dump scheme is an illegal procedure that has come more into light because of the advent of the internet. This usually targets the small and micro cap stocks since it is easier and simpler to manipulate and misrepresent. 

It is your responsibility to be cautious and careful while you go for any investment and get trapped into any scam. You have to make sure that you always execute your own research work and studies so that you are always on the right track and avid such scams and frauds.