Creative Stock Scams

Creative Stock Scams: "Stock scams have been around since, well, probably about five minutes after the invention of stocks. Over the years, their variety has been limited only by the collective ingenuity of the scammers.
The classic scam of our time is the pump-and-dump, recently popularized on TV in The Sopranos, and in films such as Boiler Room. In the pump-and-dump, a semi-legit �brokerage office� quietly buys up a block of stock in a company that is selling cheap and hasn�t moved for a while. Then a team of �agents� cold calls prospective buyers from one of the lists of investors that are readily available, and touts the stock as being just about to make an explosive move (based on �insider information� of course). The buyer is badgered mercilessly, while being told that he or she needs to get in on the action immediately, or miss out. When enough suckers have bought, driving up the price, the scammers sell out and close down their office, leaving their victims holding the bag when the stock�s value plunges back to its real worth.
The Internet has made a variation of the pump-and-dump even easier. Most stocks now have a �message board,� on which those who follow the company can post news, opinions, and general information. Scammers looking to make a quick profit have been known to use these boards to post messages touting the company�s prospects, often posing as a corporate officer or other insider. Some may post to the board under a number of different aliases, each more enthusiastic than the last. Again the idea is to engineer a rapid rise in share price, so that the scammer can then cash out. (It happens the other way, too. Scam artists can sell a stock short, then post negative �news� on a board, hoping to drive down the price.) "