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board marked do you alert options alerts here jimmy?
I guess this board is no longer in use?
and may god Bless the United States of Rockefeller.........lol
Hello, brother....
following this board from now on
PS : check your gmail
Hey jimmybob how do I go about subscribing to your premium service?
hey Jimmy.. new board ? sign me up :)
Manipulated it is
There’s New Evidence to Suggest that Crime In The Financial Markets is Rife
New York, New York: Everyone has heard of the Wikipedia but not everyone knows about the Investopedia, a Forbes website, that monitors finance for market players. One of the issues it is concerned about is market manipulation, actions by rogue and not so rogue players who, working alone or together, unduly influence the way our supposed “free” markets function.
It is a fascinating source of information for the uninitiated who hear the daily reports on the ups and downs of the Dow and believe that somehow it is all part of the natural order of the universe.
It isn’t
Thanks to an even more informative web site, Gamingthemarket.com, we learn that in fact markets are subject to, prone to, and characterized by all sorts of manipulative practices. Here’s one you may not have heard of.
“Ghosting: An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. Ghosting is used by corrupt companies to affect stock prices so they can profit from the price movement.
This practice is illegal because market makers are required by law to act in competition with each other. It is known as "ghosting" because, like a spectral image or a ghost, this collusion among market makers is difficult to detect. In developed markets, the consequences of ghosting can be severe.” -Investopedia
It looks like we have gone from the age of the trustbuster to the era of the ghost buster as fiction once again turns into “faction.”
Last week, the price of oil mysteriously shot up. There were reports of yet another “rogue” trader. The New York Times later reported:
“Reacting to recent swings in oil prices, federal regulators said they were considering limits on “speculative” traders in markets for oil and other energy products.” Of course, the big banks and Wall Street firms are expected to zealously oppose more oversight.
Some things don’t change. Anyone remember Nicholas Leeson, a one man engine of speculation who lost over a billion dollars and brought down his own bank before going to jail? He later gloated on his website; “How could one trader bring down the banking empire that had funded the Napoleonic Wars?"
On July 4th, Bloomberg News reported:
“Sergey Aleynikov, an ex-Goldman Sachs computer programmer, was arrested July 3 after arriving at Liberty International Airport in Newark, New Jersey, U.S. officials said. Aleynikov, 39, who has dual American and Russian citizenship, is charged in a criminal complaint with stealing the trading software. At a court appearance July 4 in Manhattan, Assistant U.S. Attorney Joseph Facciponti told a federal judge that Aleynikov’s alleged theft poses a risk to U.S. markets. Aleynikov transferred the code, which is worth millions of dollars, to a computer server in Germany, and others may have had access to it, Facciponti said, adding that New York-based Goldman Sachs may be harmed if the software is disseminated.”
The next sentence is particularly eye-opening: “The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” Facciponti said.”
J.S. Kim who runs an independent investment research and wealth consultancy firm commented on the financial site, Seeking Alpha:
“It’s curious to note that Goldman Sachs has admitted that it has developed trading software that could be used to, in their own words, “manipulate markets in unfair ways”, yet nobody in the mainstream media has questioned whether Goldman Sachs was / and is using its proprietary trading platform to manipulate markets in unfair ways. Only extremely naive investors with zero understanding of how global stock markets operate would deny that there has been continual and excessive intervention into US stock markets to prop them up over the past several months.”
.
I spoke with Christian Angelich, the founder or Gaming the Market.com, a former airline pilot turned trader, who told me that in recent years efforts to manipulate markets have become pervasive and, yet, are mostly illegal.
He too cited Goldman when I asked how it often works.
Without prodding, he came up with one possible scenario involving a firm like Goldman Sachs that had 00 millions of shares of Intel it wanted to offload. So they issue a report predicting it will sell for $50 a share. As a major player at the New York exchange where they do l out of ever ten shares, and have become even more powerful now that competitors like Bear, Lehman and others are out of business, their recommendations are given lots of weight even though in this case they really want to just dump the shares.
“None of this is new,” he told me, “its been going on for years. Even the founding Fathers warned about it, but is more egregious today in part because of all the technology these firms have.” He says it is illegal and has been winked at, citing one example: former Senator Phil Gramm attaching a plan to kill the Glass Steagall act as an amendment to a bill that then sailed through the Congress while his wife was on the Commodity Futures Trading Commission.”
“We will only have a real bottom,” he believes’ when the masses are out in the streets like they are in parts of Europe. For change, pressure from below is needed.”
Sometimes unexpected events can take over markets too, as Michael Jackson’s untimely demise’s meteoric impact on the music market shows. His sales went from nowhere to everywhere confirming one jaded pundit’s cynical comment that “he was more valuable dead than alive.”
In making a new film on the financial crisis as a crime story, I spoke with Moe Saceriby, a former lawyer and VP of Standard and Poors who went on to become a UN Ambassador. I knew him as a credible analyst of current affairs, an experienced professional. We spoke on Wall Street.
He told me:
‘I think we had a transition from what truly was a free-market system to something now that is out of control and probably what I would define as a predatory system where we are not so much dealing anymore about the notion of fair prices, and the notion of markets that -- that work transparently an open late but in fact frequently markets that are manipulated for the end of maybe a few out there -- a few investors, mega-investors. It's even -- even that's very difficult to tell. “
This was new to me---the whole system being described as predatory which smacks of criminal.
He went on:
“And these market movements may not be necessarily reflective of the underlying value of that real asset whether it be a commodity or whether it be in equity. What I mean by that is frequently you see prices wildly fluctuating. As an example: how could oil be at $147 in July of 2008 and all of a sudden fall to below $40 a barrel at the end of that same year? We all knew that in fact the whole economic system was in trouble over a year ago. But the price of oil kept rising sharply. The price of foods kept rising sharply.
Question: “Manipulated?”
Answer: “I think it was manipulated. There is a lot of debate whether it's about speculation or manipulation but there is an old expression among traders which is ‘the trend is your friend.’ What that means is that in fact a few people can use significant resources, financial resources, freely as a weapon.”
Umm, weapons on Wall Street? Already credit default swaps have been compared to financial hydrogen bombs as financial terms merge with military language. Does anyone doubt that these Wall Street manipulations have become form of warfare and that, until now, the wrong side has been ahead.
Surely, all this demands a serious investigation and serious regulation. Will it happen?
Mediachannel.org’s News Dissector Danny Schechter is producing a film on “the Crime of Our Time” as a follow-up to his book PLUNDER; Investigating Our Economic Calamity (Cosimo Book, Amazon.com) Comments to dissector@mediachannel.org
Wall Street's mantra is that markets move randomly and reflect the collective wisdom of investors. The truth is quite opposite. The government's visible hand and insiders control markets and manipulate them up or down for profit - all of them, including stocks, bonds, commodities and currencies.
It's financial fraud or what former high-level Wall Street insider and former Assistant HUD Secretary Catherine Austin Fitts calls "pump and dump," defined as "artificially inflating the price of a stock or other security through promotion, in order to sell at the inflated price," then profit more on the downside by short-selling. "This practice is illegal under securities law, yet it is particularly common," and in today's volatile markets likely ongoing daily.
Why? Because the profits are enormous, in good and bad times, and when carried to extremes like now, Fitts calls it "pump(ing) and dump(ing) of the entire American economy," duping the public, fleecing trillions from them, and it's more than just "a process designed to wipe out the middle class. This is genocide (by other means) - a much more subtle and lethal version than ever before perpetrated by the scoundrels of our history texts."
Fitts explains that much more than market manipulation goes on. She describes a "financial coup d'etat, including fraudulent housing (and other bubbles), pump and dump schemes, naked short selling, precious metals price suppression, and active intervention in the markets by the government and central bank" along with insiders. It's a government-business partnership for enormous profits through "legislation, contracts, regulation (or lack of it), financing, (and) subsidies." More still overall by rigging the game for the powerful, while at the same time harming the public so cleverly that few understand what's happening.
Market Rigging Mechanisms - The Plunge Protection Team
On March 18, 1989, Ronald Reagan's Executive Order 12631 created the Working Group on Financial Markets (WGFM) commonly known as the Plunge Protection Team (PPT). It consisted of the following officials or their designees:
-- the President;
-- the Treasury Secretary as chairman;
-- the Fed chairman;
-- the SEC chairman; and
-- the Commodity Futures Trading Commission chairman.
Under Sec. 2, its "Purposes and Functions" were stated as follows:
(2) "Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence, the Working Group shall identify and consider:
(1) the major issues raised by the numerous studies on the events (pertaining to the) October 19, 1987 (market crash and consider) recommendations that have the potential to achieve the goals noted above; and
(2)....governmental (and other) actions under existing laws and regulations....that are appropriate to carry out these recommendations."
In August 2005, Canada-based Sprott Asset Management (SAM) principals John Embry and Andrew Hepburn headlined their report on the US government's "surreptitious" market interventions: "Move Over, Adam Smith - The Visible Hand of Uncle Sam" to prevent "destabilizing stock market declines. Comprising key government agencies, stock exchanges and large Wall Street firms," this group "is significant because the government has never admitted to private-sector membership in the Working Group," nor is it hinting that manipulation works both ways - to stop or create panic.
"Current mythology holds that (equity) prices rise and fall on the basis of market forces alone. Such sentiments appear to be seriously mistaken....And as official rhetoric continues to toe the free market line, manipulation has become increasingly apparent....with the active participation of selected investment banks and brokerage houses" - the Wall Street giants.
In 2004, Texas Hedge Report principals Steven McIntyre and Todd Stein said "Almost every floor trader on the NYSE, NYMEX, CBOT and CME will admit to having seen the PPT in action in one form or another over the years" - violating the traditional notion that markets move randomly and reflect popular sentiment.
Worse still, according to SAM principals Embry and Hepburn, "the government's unwillingness to disclose its activities has rendered it very difficult to have a debate on the merits of such a policy," if there are any.
Further, "virtually no one ever mentions government intervention publicly....Our primary concern is that what apparently started as a stopgap measure may have morphed into a serious moral hazard situation."
Worst of all, if government and Wall Street collude to pump and dump markets, individuals and small investment firms can get trampled, and that's exactly what happened in late 2008 and early 2009, with much more to come as the greatest economic crisis since the Great Depression plays out over many more months.
That said, the PPT might more aptly be called the PPDT - The Plunge Protection/Destruction Team, depending on which way it moves markets at any time. Investors beware.
Manipulating markets is commonplace and as old as investing. Only the tools are more sophisticated and amounts involved greater. In her book, "Morgan: American Financier," Jean Strouse explained his role in the Panic of 1907, the result of stock market and real estate speculation that caused a market crash, bank runs, and hysteria. To restore confidence, JP Morgan and the Treasury Secretary organized a group of financiers to transfer funds to troubled banks and buy stocks. At the time, rumors were rampant that they orchestrated the panic for speculative profits and their main goals:
-- the 1908 National Monetary Commission to stabilize financial markets as a precursor to the Federal Reserve; and
-- the 1910 Jekyll Island meeting where powerful financial figures met in secret for nine days and created the private banking cartel Federal Reserve System, later congressionally established on December 23, 1913 and signed into law by Woodrow Wilson.
Morgan died early that year but profited hugely from the 1907 Panic. It let him expand his steel empire by buying the Tennessee Coal and Iron Company for about $45 million, an asset thought to be worth around $700 million. Today, similar schemes are more than ever common in the wake of the global economic crisis creating opportunities to buy assets cheap by bankers flush with bailout cash. Aided by PPT market rigging, it's simpler than ever.
Wharton Professor Itay Goldstein and Said Business School and Lincoln College, Oxford University Professor Alexander Guembel discussed price manipulation in their paper titled "Manipulation and the Allocational Role of Prices." They showed how traders effect prices on the downside through "bear raids," and concluded:
"We basically describe a theory of how bear raid manipulation works....What we show here is that by selling (a stock or more effectively short-selling it), you have a real effect on the firm. The connection with real value is the new thing....This is the crucial element," but they claim the process only works on the downside, not driving shares up.
In fact, high-volume program trading, analyst recommendations, positive or negative media reports, and other devices do it both ways.
Also key is that a company's stock price and true worth can be highly divergent. In other words, healthy or sick firms may be way-over or under-valued depending on market and economic conditions and how manipulative traders wish to price them, short or longer term.
The idea that equity prices reflect true value or that markets move randomly (up or down) is rubbish. They never have and more than ever don't now.
The Exchange Stabilization Fund (ESF)
The 1934 Gold Reserve Act created the US Treasury's ESF. Section 7 of the 1944 Bretton Woods Agreements made its operations permanent. As originally established, the Treasury ran the Fund outside of congressional oversight "to keep sharp swings in the dollar's exchange rate from (disrupting) financial markets" through manipulation. Its operations now include stabilizing foreign currencies, extending credit lines to foreign governments, and last September to guaranteeing money market funds against losses for up to $50 billion.
In 1995, the Clinton administration used the fund to provide Mexico a $20 billion credit line to stabilize the peso at a time of economic crisis, and earlier administrations extended loans or credit lines to China, Brazil, Ecuador, Iceland and Liberia. The Treasury's web site also states that:
"By law, the Secretary has considerable discretion in the use of ESF resources. The legal basis of the ESF is the Gold Reserve Act of 1934. As amended in the late 1970s....the Secretary (per) approval of the President, may deal in gold, foreign exchange, and other instruments of credit and securities."
In other words, ESF is a slush fund for whatever purposes the Treasury wishes, including ones it may not wish to disclose, such as manipulating markets, directing funds to the IMF and providing them with strings to borrowers as the Treasury's site explains:
"....Treasury has often linked the availability of ESF financing to a borrower's use of the credit facilities of the IMF, both to support the IMF's role and to strengthen assurances that there will be timely repayment of ESF financing."
The Counterparty Risk Management Policy Group (CRMPG)
Established in 1999 in the wake of the Long Term Capital Management (LTCM) crisis, it manipulates markets to benefit giant Wall Street firms and high-level insiders. According to one account, it was to curb future crises by:
-- letting giant financial institutions collude through large-scale program trading to move markets up or down as they wish;
-- bailing out its members in financial trouble; and
-- manipulating markets short or longer-term with government approval at the expense of small investors none the wiser and often getting trampled.
In August 2008, CRMPG III issued a report titled "Containing Systemic Risk: The Road to Reform." It was deceptive on its face in stating that CRMPG "was designed to focus its primary attention on the steps that must be taken by the private sector to reduce the frequency and/or severity of future financial shocks while recognizing that such future shocks are inevitable, in part because it is literally impossible to anticipate the specific timing and triggers of such events."
In fact, the "private sector" creates "financial shocks" to open markets, remove competition, and consolidate for greater power by buying damaged assets cheap. Financial history has numerous examples of preying on the weak, crushing competition, socializing risks, privatizing profits, redistributing wealth upward to a financial oligarchy, creating "tollbooth economies" in debt bondage according to Michael Hudson, and overall getting a "free lunch" at the public's expense.
CRMPG explains financial excesses and crises this way:
"At the end of the day, (their) root cause....on both the upside and the downside of the cycle is collective human behavior: unbridled optimism on the upside and fear on the downside, all in a setting in which it is literally impossible to anticipate when optimism gives rise to fear or fear gives rise to optimism...."
"What is needed, therefore, is a form of private initiative that will complement official oversight in encouraging industry-wide practices that will help mitigate systemic risk. The recommendations of the Report have been framed with that objective in mind."
In other words, let foxes guard the henhouse to keep inventing new ways to extract gains (a "free lunch") in increasingly larger amounts - "in the interest of helping to contain systemic risk factors and promote greater stability."
Or as Orwell might have said: instability is stability, creating systemic risk is containing it, sloping playing fields are level ones, extracting the greatest profit is sharing it, and what benefits the few helps everyone.
Michel Chossudovsky explains that: "triggering market collapse(s) can be a very profitable undertaking. (Evidence suggests) that the Security and Exchange Commission (SEC) regulators have created an environment which supports speculative transactions (through) futures, options, index funds, derivative securities (and short-selling), etc. (that) make money when the stock market crumbles....foreknowledge and inside information (create golden profit opportunities for) powerful speculators" able to move markets up or down with the public none the wiser.
As a result, concentrated wealth and "financial power resulting from market manipulation is unprecedented" with small investors' savings, IRAs, pensions, 401ks, and futures being decimated from it.
Deconstructing So-Called "Green Shoots"
Daily the corporate media trumpet them to lull the unwary into believing the global economic crisis is ebbing and recovery is on the way. Not according to longtime market analyst Bob Chapman who calls green shoots "Poison Ivy" and economist Nouriel Roubini saying they're "yellow weeds" at a time there's lots more pain ahead.
For many months and in a recent commentary he refers to "the worst financial crisis, economic crisis and recession since the Great Depression....the consensus is now becoming optimistic again and says that we are going to go from minus 6 percent growth to positive growth in the second half of the year....my views are much more bearish....The problems of the financial system are severe. Many banks are still insolvent."
We're "piling public debt on top of private debt to socialize the losses; and at some point the back of (the) government('s) balance sheet is going to break, and if that happens, it's going to be a disaster." Short of that, he, Chapman, and others see the risks going forward as daunting. As for the recent stock market rise, they both call it a "sucker's rally" that will reverse as the US economy keeps contracting and the financial system suffers unexpected or manipulated shocks.
Highly respected market analyst Louise Yamada agrees. As Randall Forsyth reported in the May 25 issue of Barron's Up and Down Wall Street column:
"It is almost uncanny the degree to which 2002-08 has tracked 1932-38, 'Yamada writes in her latest note to clients.' " Her "Alternate Hypothesis" compares this structural bear market to 1929-42:
-- "the dot-com collapse parallels the Great Crash and its aftermath," followed by the 2003-07 recovery, similar to 1933-37;
-- then the late 2008 - early March 2009 collapse tracks a similar 1937-38 trajectory, after which a strong rally followed much like today;
-- then in November 1938, the market dropped 22% followed by a 26% rise and a series of further ups and downs - down 28%, up 23%, down 16%, up 13%, and a final 29% decline ending in 1942;
-- from the 1938 high ("analogous to where we are now," she says), stock prices fell 41% to a final bottom.
Are we at one today as market touts claim? No according to Yamada - top-ranked among her peers in 2001, 2002, 2003 and 2004 when she worked at Citigroup's Smith Barney division. Since 2005, she's headed her own independent research company.
She says structural bear markets typically last 13 - 16 years so this one has a long way to go before "complet(ing) the repair process." She calls the current rebound "a bungee jump," very typical of bear markets. Numerous ones occurred during the Great Depression, 8 alone from 1929 - 1932, some deceptively strong.
Expect market manipulators today to produce similar price action going forward - to enrich themselves while trampling on the unwary, well-advised to protect their dollars from becoming quarters or dimes.
Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.
Market manipulation
From Wikipedia, the free encyclopedia
Market manipulation is a deliberate attempt to interfere with the free and fair operation of the market and create artificial, false or misleading appearances with respect to the price of, or market for, a security, commodity or currency.[1] Market manipulation is prohibited in the United States under Section 9(a)(2)[2][3] of the Securities Exchange Act of 1934, and in Australia under Section s 1041A of the Corporations Act 2001. The Act defines market manipulation as transactions which create an artificial price or maintain an artificial price for a tradeable security.
[edit]Examples
Pools: "Agreements, often written, among a group of traders to delegate authority to a single manager to trade in a specific stock for a specific period of time and then to share in the resulting profits or losses."[4]
Churning: "When a trader places both buy and sell orders at about the same price. The increase in activity is intended to attract additional investors, and increase the price." (Not to be confused with another definition of churning, where a broker excessively trades a client's account to increase commission fees, which is not a market manipulation.)
Runs: "When a group of traders create activity or rumors in order to drive the price of a security up." An example is the Guinness share-trading fraud of the 1980s. In the US, this activity is usually referred to as painting the tape[5]. Runs may also occur when trader(s) are attempting to drive the price of a certain share down, although this is rare.
Ramping (the market): "Actions designed to artificially raise the market price of listed securities and to give the impression of voluminous trading, in order to make a quick profit."[6]
Wash trade: "Selling and repurchasing the same or substantially the same security for the purpose of generating activity and increasing the price"
Bear raid: "Attempting to push the price of a stock down by heavy selling or short selling."[7]
[edit]References
rock n roll ~
Marked and I'll be ready.
Thanks jimmybob!
The SEC alleges that Alexander John Hunter and Thomas Edward Hunter were just 16 years old when they set their fraud in motion beginning in 2007. They disseminated e-mail newsletters through a pair of websites they created to tout stocks selected by the robot – which they described as a highly sophisticated computer trading program that was the product of extensive research and development. Their claims were persuasive as the Hunters received at least USD1.2 million from investors primarily in the US who paid USD47 apiece for annual newsletter subscriptions. Some investors paid an additional fee for the “home version” of the robot software.
In reality, the SEC alleges that the Hunters used a third website to offer their services as stock promoters, claiming that they could “rocket” a stock’s price and increase its volume by sending out newsletters. The Hunters were consequently paid at least USD1.865 million in fees from known or suspected stock promoters, and they did not disclose to their newsletter followers the conflicting relationship between their two businesses.
“The Hunters used the anonymity of the Internet and the promise of easy riches to prey on investors,” says Thomas A Sporkin, Chief of the SEC’s Office of Market Intelligence. “While touting their supposed breakthrough investment technology on two websites, the Hunters were racking up fees as stock promoters through a third.”
According to the SEC’s complaint filed in US District Court for the Southern District of New York, the Hunters created websites Doublingstocks.com and Daytradingrobot.com to falsely tout that a former trading algorithm programmer from a large investment bank had designed a stock picking robot that they named “ Marl.” The robot could purportedly analyse the over-the-counter securities markets and identify penny stocks that were set to experience large price increases. The brothers offered investors paid subscriptions to their e-mail newsletter that would contain the robot’s latest stock pick.
The SEC alleges that the brothers separately created the website Equitypromoter.com where they marketed their newsletter subscriber list to penny stock promoters and boasted, “One email to this list of people rockets a stock price.” The Hunters were in turn paid to send selected penny stock ticker symbols to their subscribers, who were misled to believe that the stock “picks” were the product of the robot. The Hunters sent out their newsletters near the beginning of the trading day, and the price and volume of the promoted stocks spiked dramatically as newsletter subscribers rushed to purchase shares. However, the stocks typically fell precipitously shortly thereafter, leaving investors with shares worth less than they had purchased them for earlier in the day.
According to the SEC’s complaint, the Hunters also offered subscribers a downloadable version of the stock picking robot for an additional fee of USD97. Rather than performing the analysis advertised, the software was actually designed to just deliver users a stock pick supplied by the brothers. In soliciting bids in 2007 from free-lance coders to create the software, Alexander Hunter wrote that the software should “not actually find stocks at all. It should connect to my database and simply request any new stocks I have put in.” He bluntly explained that the software “is almost a ‘fake’ piece of software and needs to simply appear advanced to the user.” Like the newsletter, the home version of the stock picking robot was no more than a fraudulent delivery vehicle for stock symbols that the Hunters had been compensated to promote.
The SEC’s complaint charges the Hunters with violating the anti-fraud provisions of the US securities laws, namely Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC is seeking permanent injunctions, disgorgement of all ill-gotten gains with prejudgment interest, and financial penalties.
Definition of Pump and Dump
What is the definition of a "pump and dump"?
A pump and dump is when someone accumulates a block of shares, touts the stock and then sells into the buying pressure that they have helped to create.
A "pump and dump" is best illustrated through an example.
Example #1. A couple of friends decide that they are going to pump and dump a penny stock called XYZ Enterprises, Inc.
XYZ Enterprises Inc. is a thinly traded issue on the pink sheets. They are "working" on a new cancer vaccine, though the company hasn't produced much of anything during their brief existence.
These friends decide that they are going to try and execute a pump and dump.
They accumulate 100,000 shares of the stock at an average price of 44 cents per share.
They then spam a number of popular online finance message boards, touting the "wonder" drug that XYZ Enterprises Inc. has been working on for years now.
Some amateur investors decide that XYZ Enterprises Inc. is the next big thing, and decide to buy some shares in the company.
Volume spikes, and suddenly XYZ Enterprises Inc. is trading at 65 cents per share.
The two friends dump their 100,000 share position in the company for an average of 60 cents per share, netting themselves a quick $20k profit in the stock.
The stock quickly falls back to earth, and is trading at 43 cents per share just days after the initial spike.
The amateur investors who feverishly bought the stock suffer large losses after the momentum in XYZ evaporates.
This is your standard "pump and dump".
Note: aside from being unethical, there is a good chance that the SEC will investigate you if you decide to participate in a "pump and dump".
Note #2: the opposite of the "pump and dump" is the "short and distort", which is when someone shorts a stock and then spreads negative information about the company.
SEC Charges Eight Individuals and Three Companies in $33 Million International Microcap Fraud
FOR IMMEDIATE RELEASE
2011-33
Washington, D.C., Feb. 1, 2011 — The Securities and Exchange Commission today filed fraud charges against the operators of a $33 million international microcap stock scheme involving the stocks of eight small U.S. companies headquartered in the People's Republic of China, Canada, and Israel.
Additional Materials
SEC Complaint
Litigation Release No. 21833
In a complaint filed in U.S. District Court for the Eastern District of Michigan, the SEC charged three companies and eight individuals with engaging in unlawful spam e-mail campaigns to pump and dump securities of microcap companies. The SEC alleges that each scheme was primarily organized and devised by one or all of the following:
Francis A. Tribble, who is a U.S. citizen and former stock promoter
How Wai Hui (a.k.a. John Hui), who is a dual citizen of Hong Kong and Canada and the former CEO of China World Trade Corp.
Kwong-Chung Chan (a.k.a. Bernard Chan), who is a citizen and resident of Hong Kong and the former CFO of China World Trade Corp.
Gregg M.S. Berger, who is a stockbroker from Yonkers, N.Y.
In a parallel criminal proceeding, the U.S. Department of Justice today unsealed an indictment against Berger, charging him with one count of conspiracy to commit securities fraud and wire fraud. Previously, in related criminal actions, Hui and Tribble pleaded guilty to conspiracy to commit wire fraud, mail fraud and to violate the CAN-SPAM Act, as well as to committing wire fraud and engaging in money laundering for their roles in the scheme to artificially inflate the prices of the securities of several companies, including China World Trade. Hui and Tribble each were sentenced to 51 months in prison for their actions.
"Foreign companies and perpetrators with global connections are increasingly using digital communications and other means in furtherance of their securities fraud schemes in U.S. markets," said Robert Khuzami, Director of the SEC's Division of Enforcement. "But as reflected in today's enforcement actions, U.S. and international law enforcement authorities are joining forces to effectively detect, disrupt and prosecute these frauds. Combating microcap fraud and pump-and-dump schemes, irrespective of where they originate, continues to be a top enforcement priority for the SEC."
The SEC also charged the following corporate insiders for their participation in the pump-and-dump schemes and for engaging in a fraudulent scheme to conceal the sales of millions of shares of their companies' securities:
Xiaoqing Du (a.k.a. Angela Du), who is a dual citizen of Canada and China and CEO and director of Global Peopleline Telecom Inc.
Chi Shing Ng (a.k.a. Daniel Ng), who is a citizen and resident of Hong Kong and CEO and director of China Digital Media Corp.
Shay Ben-Asulin, who is a citizen and resident of Israel and former Chairman of m-Wise Inc.
Mordechai Broudo, an Italian citizen and resident of Israel and former CEO of m-Wise.
The three companies charged are China Digital, Global Peopleline, and m-Wise.
The SEC alleges that at various times between January 2005 and December 2007, each of the defendants engaged in one or more schemes to pump up the price and volume of the securities of one or more of the companies by paying for false spam e-mail campaigns.
According to the SEC's complaint, the false spam e-mails lured investors into the market and drove up demand in the stocks by, among other things, touting non-existent IPOs and acquisitions, presenting an unrealistic picture of the companies' business prospects, providing baseless share price projections, or including false disclaimers. The defendants then dumped millions of shares of these securities into the hyped market through nominee brokerage accounts they opened with Berger, reaping millions of dollars in profits. All eight companies' stocks were dually quoted on the Over-the-Counter Bulletin Board and Pink Sheets.
The SEC's complaint alleges that Tribble masterminded the pump-and-dump schemes with respect to five of the companies, and arranged for the spam e-mail campaigns for two other companies. Berger, a long-time friend of Tribble, played a central role in the schemes by arranging for the pump and dump of m-Wise and facilitating the sales of millions of shares in all eight companies through nominee brokerage accounts. John Hui and Bernard Chan also played key roles in the fraudulent schemes by finding U.S. public shell companies to use in bringing private Chinese companies public through reverse mergers. They arranged for the deposit and sale of stock through nominee brokerage accounts, and coordinated the transfer of the unlawful trading proceeds to pay for the spam e-mail campaigns among other things.
The SEC seeks permanent injunctions, disgorgement and financial penalties against Berger and Chan for violations of the antifraud and registration provisions, and against Angela Du and Global Peopleline for violations of the antifraud, registration, and reporting provisions of the federal securities laws. The Commission also seeks an officer and director bar against Du, and penny stock bars against Berger, Chan, and Du.
Without admitting or denying the SEC's allegations, Tribble, John Hui, Daniel Ng, Ben-Asulin, Broudo, m-Wise, and China Digital have agreed to settle the charges against them. The settlements are pending final approval by the court.
Tribble agreed to a final judgment permanently enjoining him from violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Tribble also agreed to pay disgorgement of $2,549,520 and prejudgment interest of $349,208. Tribble consented to be barred from participating in an offering of any penny stock.
John Hui agreed to a final judgment permanently enjoining him from violating Sections 5(a), 5(c), and 17(a) of the Securities Act, Sections 10(b) and 16(a) of the Exchange Act and Rules 10b-5, 13a-14, 16a-2, and 16a-3 thereunder, and from aiding and abetting violations of Sections 13(a) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder. Hui agreed to pay disgorgement of $681,117 and prejudgment interest of $162,717. Hui also agreed to be barred from acting as an officer or director of a public reporting company and from participating in an offering of any penny stock.
Daniel Ng agreed to a final judgment permanently enjoining him from violating Sections 5(a), 5(c), and 17(a) of the Securities Act, Sections 10(b) and 16(a) of the Exchange Act and Rules 10b-5, 13a-14, 16a-2, and 16a-3 thereunder, and from aiding and abetting violations of Sections 13(a) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-11 thereunder. Ng also consented to be barred from acting as an officer or director of a public reporting company and from participating in an offering of any penny stock. China Digital agreed to a permanent injunction from violations of Sections 5(a), 5(c), and 17(a) of the Securities Act, and Sections 10(b) and 13(a) of the Exchange Act and Rules 10b-5 and 13a-1 thereunder. China Digital also agreed to pay disgorgement of $200,000.
Ben-Asulin and Broudo agreed to a final judgment permanently enjoining them from violating Sections 5(a), 5(c), and 17(a) of the Securities Act, Sections 10(b) and 16(a) of the Exchange Act and Rules 10b-5, 13a-14, 16a-2, and 16a-3 thereunder, and from aiding and abetting violations of Sections 13(a) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder. Ben-Asulin and Broudo agreed to be barred from acting as officers or directors of a public reporting company and from participating in an offering of any penny stock. m-Wise agreed to a permanent injunction from further violations of Sections 5(a), 5(c), and 17(a) of the Securities Act, and Sections 10(b) and 16(a) of the Exchange Act and Rules 10b-5 and 13a-1 thereunder. m-Wise, Ben-Asulin, and Broudo agreed to pay, jointly and severally, disgorgement of $400,000.
The SEC's case was investigated by senior counsel Jennifer L. Crawford and senior accountant Daniel L. Koster.
The SEC acknowledges and appreciates the assistance of the U.S. Attorney's Office for the Eastern District of Michigan, the Department of Justice, Computer Crime and Intellectual Property Section, the Hong Kong Securities and Futures Commission, and the Cyprus Securities and Exchange Commission.
The SEC's investigation is continuing.
# # #
For more information about this enforcement action, contact:
Daniel M. Hawke, Regional Director
Elaine C. Greenberg, Associate Regional Director
Mary P. Hansen, Assistant Regional Director
SEC Philadelphia Regional Office
(215) 597-3100
http://www.sec.gov/news/press/2011/2011-33.htm
SEC Says Rudy Ruettiger Is A Stock Scammer
14 comments, 5 called-out + Comment now
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To many football and movie fans, Daniel “Rudy” Ruettiger is a hero, an ordinary kid who overcame extraordinary odds through hard work and determination to become part of Notre Dame folklore.
The Securities & Exchange Commission, however, says Rudy Ruettiger has grown up to become a penny stock promoter and scammer. The former Notre Dame walk-on has agreed to pay $382,866 to resolve the SEC’s claim that he participated in a pump-and-dump, fraudulently inducing investors to bid up the stock of his sports drink company, Rudy Nutrition. He did not admit or deny the allegations.
According to the SEC complaint filed in federal court in Las Vegas, Ruettiger’s company sold only a small amount of a sports drink called “Rudy” and instead the company served as a vehicle for a 2008 pump-and-dump scheme that generated $11 million in illicit profits. The SEC revoked registration of the stock of Rudy Nutrition in 2008.
“Investors were lured into the scheme by Mr. Ruettiger’s well-known, feel-good story but found themselves in a situation that did not have a happy ending,” said Scott Friestad, associate director of the SEC’s enforcement division, in a statement. “The tall tales in this elaborate scheme included phony taste tests and other false information.”
What kind of tall tales is the SEC talking about? One example is literature mailed to potential investors falsely claiming that in “a major southwest test, Rudy outsold Gatorade 2 to 1.” While these sorts of promotions were going on, the SEC says promoters were artificially inflating the price of Rudy Nutrition’s stock while selling unregistered shares to investors.
Like his heroic football story, the stock scam has its origins in South Bend, Ind., where Ruettiger and one of his college buddies started a sports drink company they eventually moved to Las Vegas. There, Ruettiger brought in an experienced penny stock promoter, Stephen DeCesare, who was his neighbor. DeCesare became the primary organizer of the stock scam, the SEC claims, putting together a reverse merger of a Pink Sheets-traded shell company.
DeCesare brought in other stock promoters to inflate the stock price through bogus trading and stock touting, increasing the company’s stock price from 25 cents to $1.05. The amount of stock trading hands rose from 720 shares to 3 million. But in this case, the story turned out to be unbelievable.
Prophecy~~~~
UNITE THE CLANS!
Thanks and Welcome!
When i used to get the same returns in pinks that i get in options now ~ :)
IENT : .0025 to .049 up 1960%!!!
SPHE: .01 to .20 up 2000%!!!!
TDGI: .0016 to .049 up 3062%!!!!
DMPD: .0006 to .007 up 1166%!!!!
IBXG : .0037 to .0094 up 254%
2010 ALERTS ~
JAN '10
XTPT ~ .0018 to .004 up 222%
IFMX ~ .003 to .015 up 500%!!!
RTWW - .0018 to .038 up 2200%!!!
Feb '10
PHLH ~ .0016 to .0089 up 556%
RLAB ~ .004 to .018 up 450%!!!
March '10
NDYN ~ .13 to .36 up 277%!!!!
WTCG ~ .0015 to .01 up 666%!!!!
April '10
EKWX ~ .0003 to .0042 up 1400%!!!!!!!!
DMPD ~ .004 to .015 up up 375%!!!!
MTPR ~ THE FIRST DUCK ~ .005 alert to .0092 and sold off (Thank you BIG APPLE)
May '10
CIND ~ .009 to .12 up 1333% Yes, the first anywhere to alert it.
June '10
STHG ~ .0048 to .024 UP 500% !!
January '11
ZUPC ~ .0005 to .0037 up 740% so far!
BGTH ~ .0165 to .099 Up 600% so far!!!!
ACTT ~ .0375 to .21 up 560%!!
February '11
BYRG ~ .008 to .019 Up 237.50% so far!!
great board!!!!
And BTW: My best option play will be alerted here on Thurs : http://investorshub.advfn.com/boards/chairmail_sub.asp?board_id=15716
If your reading here reply to this post... want to show how manipulated everything in the world is...
Want This board to be top 10 read tomorrow...
219 on the mailing list ~ should be 500 http://investorshub.advfn.com/boards/chairmail_sub.asp?board_id=15716
69 boardmarks??? SHould be over 100 ~ :) follow this board for money makers!
I guess I might be 11th!
I am in like Flynn. Need a no brainer to end the year and start the new one off right.
marked your board:) Would love to see the penny market come back to LIFE!
count me in bobber!!!
Signed up and board marked.
John
PLEASE REPLY HERE IF YOUR READY TO UNITE THE CLANS AND END 2011 IN STYLE...
EXPECTING 50-100 REPLIES HERE FOLKS ~~~ (have 10 so far from edited post)
Gotta get the IBOX update.. quote a few 100-1000%+ movers so far ~~~
ANOTHER JIMMY ALERT WINNER ~ instant 10 bagga today ~~~
from BoardMail Confirmation <support@investorshub.com>
to jimmybobihub@gmail.com
date Tue, Apr 5, 2011 at 11:45 AM
subject DRMX ~ .035
hide details 11:45 AM (6 hours ago)
Speculation moves stocks... folks posted about this one yesterday as a bottom play. Dont think folks saw this:
Brandon Truaxe Sells Brainchild Brand for $72.1M
http://www.prweb.com/releases/2011/01/prweb5018724.htm
Company all did a 6 to 1 R/S in DEC and name change...
Tight SS now ... Think this GOES NUTZ TODAY ~~~
JIMMY ALERTTTTT
TRADE SMART!!!!
In @ .04-.045 take some off on the way up IMHO ~~~
GLTAAAA
Happy TRADINGGGGG
Jimmybob
gm. thought i was the only one doing dd this early morning.
gm. thought i was the only one doing dd this early morning.
Good Morning Everyone!!!!
Just starting a board to post the Beaner Alerts/Jimmybob Alerts
I'll spruce the IBOX up when I get a chance.
Recent Runners and alerts June '09 - Dec '09
IENT : .0025 to .049 up 1960%!!!
SPHE: .01 to .20 up 2000%!!!!
TDGI: .0016 to .049 up 3062%!!!!
DMPD: .0006 to .007 up 1166%!!!!
IBXG : .0037 to .0094 up 254%
2010 ALERTS ~
JAN '10
XTPT ~ .0018 to .004 up 222%
IFMX ~ .003 to .015 up 500%!!!
RTWW - .0018 to .038 up 2200%!!!
Feb '10
PHLH ~ .0016 to .0089 up 556%
RLAB ~ .004 to .018 up 450%!!!
March '10
NDYN ~ .13 to .36 up 277%!!!!
WTCG ~ .0015 to .01 up 666%!!!!
April '10
EKWX ~ .0003 to .0042 up 1400%!!!!!!!!
DMPD ~ .004 to .015 up up 375%!!!!
MTPR ~ THE FIRST DUCK ~ .005 alert to .0092 and sold off (Thank you BIG APPLE)
May '10
CIND ~ .009 to .12 up 1333% Yes, the first anywhere to alert it.
June '10
STHG ~ .0048 to .024 UP 500% !!
January '11
ZUPC ~ .0005 to .0037 up 740% so far!
BGTH ~ .0165 to .099 Up 600% so far!!!!
ACTT ~ .0375 to .21 up 560%!!
February '11
BYRG ~ .008 to .019 Up 237.50% so far!!
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