- Pump and dump schemes, involving use of false or misleading statements to hype stocks, which are "dumped" on the public at inflated prices. Such schemes involve telemarketing and Internet fraud.[1]
- Chop stocks, which are stocks purchased for pennies and sold for dollars, providing both brokers and stock promoters massive profits. Brokers are often paid "under the table" undisclosed payoffs to sell such stocks.[1][3]
- Dump and dilute schemes, where companies repeatedly issue shares for no reason other than taking investors' money away. Companies using this kind of scheme tend to periodically reverse-split the stock.
- Other unscrupulous brokerage practices, including "bait and switch," unauthorized trading, and "no net sales" policies in which customers are prohibited or discouraged from selling stocks.[5]
from wiki...
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