Delcath Systems Inc (DCTH)

[Delcath_Org]

In general, market manipulation schemes are meant to increase the stock price and liquidity of targeted stocks to facilitate the sale of shares at inflated prices by informed parties, such as insiders, promoters, or others involved in the scheme.

Our group would argue that the OTC markets are a preferred forum for fraudulent behavior due to the lack of or deficiencies in company-provided disclosures. The notion here is twofold.

First, misleading statements by fraudulent parties about a company are more likely to result in stock price and volume movements if investors lack alternative sources of information, such as well disseminated, timely, and credible disclosures.

Second, the most opaque OTC companies tend to have the least liquid stocks. For those companies, even small levels of trading activity might be viewed as abnormal or informative, thereby mechanically increasing the stock price even in the absence of false information.

Manipulation in OTC stocks occurs in several ways, such as through the release of false or exaggerated information via email spam campaigns, rumors in Internet chat rooms or forums, or dubious press releases.

OTC companies are also commonly touted through paid promotions, where the fact of the compensation to the promoter is often not disclosed by the company being promoted.

Education is the key to successful trading.