Pump and dump

Clusterstock  Dec 21  Comment 
   FINRA, the US financial regulator, put out an alert on Thursday to warn investors about risks associated with investing in companies linked to the cryptocurrency space. Share prices of companies connected to the booming crypto market...
Clusterstock  Dec 8  Comment 
Business Insider has reported on the prevalence of "pump and dump" scams in cryptocurrency markets. A person claiming to organise these scams got in touch with BI after our first report. He argues that manipulation is "everywhere" and says...
Clusterstock  Nov 29  Comment 
Bittrex emails users to "discourage any type of market manipulation, including pump groups." Email follows BI investigation that exposed widespread "pump and dump" scams in parts of the $300 billion cryptocurrency market. LONDON — The...
Clusterstock  Nov 14  Comment 
LONDON – "This is the biggest pump community which will help you make money," reads the ad sent to a Telegram channel with 17,000 followers. The group in question is the "PumpKing Community." It is one of many groups on the messaging app...
Financial Times  May 23  Comment 
Regardless of the US strategic reserve, Opec needs to meet the supply challenge from US shale producers
Forbes  Apr 17  Comment 
Ashmore Group chief researcher tells investors to sell the news.
Benzinga  Feb 2  Comment 
Wins Finance Holdings Inc (NASDAQ: WINS) shares jumped more than $100 in early Thursday trading without any major news from the company. The massive 35 percent move is a continuation of a huge tear the stock has been on in the past several...
Benzinga  Nov 30  Comment 
Singlepoint Inc (OTC: SING) is an over-the-counter traded nano-cap technology company focused on mobile payments. The stock more than doubled in price over the past month, taking year-to-date gains to more than 225 percent. However, shares still...
Forbes  Sep 24  Comment 
Preet Bharara, U.S. Attorney for the Southern District of New York, alleges Gerova Financial was controlled by scam artists who used a set of undisclosed deals to reap tens of millions of dollars in illegal profits through a carefully orchestrated...


It is a scheme that attempts to boost the price of a stock through recommendations based on false, misleading or greatly exaggerated statements. The perpetrators of this scheme, who already have an established position in the company's stock, sell their positions after the hype has led to a higher share price. This practice is illegal based on securities law and can lead to heavy fines.

The victims of this scheme will often lose a considerable amount of their investment as the stock often falls back down after the process is complete.

Traditionally, this type of scheme was done through cold calling, but with the advent of the internet this illegal practice has become even more prevalent. Pump and dump schemes usually target micro- and small-cap stocks, as they are the easiest to manipulate. Due to the small float of these types of stocks it does not take a lot of new buyers to push a stock higher.

Claims about how a stock is set to break out should be met with a considerable amount of caution. It is important to always do your own research in a stock before making an investment.

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