No Recovery, No Fee

424-835-5733 | 310-525-3516
866-451-2517

You may have lost money in your investment portfolio,
due to mismanagement and not even know it.

Pump and dump: yet another securities fraud-based variation

It certainly would be hard to find a criminal realm to rival that of securities fraud for the sheer creativity and disingenuous activities of its more notable purveyors.

Undoubtedly, con artists and scammers were already at work when humans first started living in caves, employing various tricks and ruses to extract wealth -- in whatever form it was then perceived and valued -- from gullible members of their tribes.

Although the material world is of course far different these days, the motivation of scammers remains the same.

The bottom line is this: Through whatever artifice possible, divest third parties of their hard-earned cash.

We have alluded to many common ruses employed by agents of investment and securities fraud in past blog posts, noting cons like churning, margin trading and Ponzi schemes.

Here's another one, as noted in a recent Reuters article citing the upcoming extradition from Israel to the United States of two individuals accused of securities fraud: pump-and-dump schemes.

Some of our California readers might already know what that is. And we suspect that even some who don't can simply focus for a few moments on the words and come up with a pretty good definition.

What U.S. criminal authorities have indicted the individuals for is their involvement in inducing high numbers of people to purchase stocks in what Reuters called "thinly traded companies." Increased purchasing tends to cause a spike in stock prices -- that is, it pumps them up. And once pumped up, inside players can sell off -- e.g., dump -- their holdings and make a huge profit.

Reportedly, the two men and one other individual are also being indicted for illegal online gambling and hacking activities enabling them to steal private data belonging to more than 100 million people.

No Comments

Leave a comment
Comment Information

Our Office Location

The Law Offices of Marc I. Zussman
10250 Constellation Blvd.
Suite 2300
Los Angeles, CA 90067
Map & Directions

Local: 424-835-5733
Local: 310-525-3516
Toll Free: 866-451-2517
Fax: 310-525-3528

map