"Pump and dump" is a form of microcap stock fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme "dump" their overvalued shares, the price falls and investors lose their money. Stocks that are the subject of pump and dump schemes are sometimes called "chop stocks".
While fraudsters in the past relied on cold calls, the Internet now offers a cheaper and easier way of reaching large numbers of potential investors.
Read more about Pump And Dump: Pump and Dump Scenarios, Short and Distort, Regulation
Famous quotes containing the words pump and/or dump:
“My nurses, those starchy ghosts,
hover over me for my lame hours
and my lame days. The mechanics
of the body pump for their tricks.”
—Anne Sexton (1928–1974)
““... It’s a day’s work
To empty one house of all household goods
And fill another with ‘em fifteen miles away,
Although you do no more than dump them down.””
—Robert Frost (1874–1963)