Stock Market Exchange: Beware Weekly

    Every Thursday from now on will have a "Beware Weekly" post.  It will be about how to avoid and be aware of the various illegal methods used to scam legit investors.  It is important to steer away from these things, and never use them!  They will land you in jail, or broke.  This week will cover the method known as "Pump and Dump".

Pump and Dump: Beware!
    There is an illegal method out there known as the "pump and dump".  Essentially a financial predator will log into investor chat rooms and try to convince people to buy a certain cheap stocks.  This cheap stock is usually in a small business and the predator will have bought quite a lot of their stocks already.  Then when they convince enough people to buy them, using all sorts of deceit, the stock price will raise.  Say they bought a stock for $1, and bought 100 shares.  They convince people to buy, and the price raises to $3.  They triple their money, and the business looks like it is doing really well.  So whats wrong with that?  The predator will suddenly sell all their stocks dropping the price substantially and can leave a business in rubble.  They make a killing and leave everyone else to deal with the mess.  This is an illegal method that all investors should be aware of!

Golden Rule: If it sounds to good to be true, it probably is.