pump and dump

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Pump and Dump

An illegal practice in which investors attempt to artificially inflate the price of a stock by disseminating inaccurate or misleading information. These investors have a long position on the stock in question and seek to inflate the price in order to sell their shares for a higher profit. Pumping and dumping violates securities laws and can lead to hefty fines. Victims often stand to lose a good deal on pumping and dumping as the price of the stock usually falls to its previous level in a relatively short period of time.

pump and dump

Market manipulation in which a thinly traded stock is accumulated, promoted, and subsequently sold at an artificially high price to unsuspecting investors. Internet chat rooms where investors gather investment information from unknown parties facilitate this illegal practice. Compare poop and scoop.

Pump and dump.

In a pump and dump scheme, a scam artist manipulates the stock market by buying shares of a low-cost stock and then artificially inflating the price by spreading rumors, typically using the Internet and phone, that the stock is about to hit new highs.

Investors who fall victim to the get-rich-quick scheme begin buying up shares, and the increased demand drives up the price. At the peak of the market, the scammer sells out at a profit, shuts down the rumor mill, and disappears. The price of the stock invariably drops dramatically and the investors who got caught in the scam lose their money.

References in periodicals archive ?
We allege that Toomer abused his role as a financial advisor to help create the false appearance of market demand in these stocks and facilitate the pump-and-dump scheme," Andrew Calamari, regional director of the SEC's New York office, said in a statement.
Investors interested in this market have to look beyond the hype and be watchful for pump-and-dump fraudsters who are eager to make their money disappear into thin air," said Gerri Walsh, FINRA's Senior Vice President for Investor Education.
Now featuring mostly stock pump-and-dump scams, image spam includes more complex images, random lines and polygons, as well images divided into randomly sized parts.
The Securities and Exchange Commission (SEC) has announced charges against a Houston-based penny stock firm and four individuals behind a pump-and-dump scheme that misguided investors to believe the firm was on the edge of creating a revolutionary technology to allow environmentally friendly oil-and-gas production.