Shonghoya Intl. Group Inc. (SNHO)

[MANOFTHEPEOPLE]

BUYER BEWARE: DEEL is hijacked shell under a promotion out of Germany.

Some investors actually seek out “pump and dump” ploys in the penny-stock market in search of lottery-like returns, according to research on German pumped stocks. Such schemes typically entail a group of investors quietly buying up a small, thinly traded stock, and then pumping prices higher via heavy promotion through emails. After convincing others to buy, the group dumps the stock en masse and leaves duped investors holding securities that are close to worthless.

It’s hard to feel sorry for investors who know a stock is being gamed and buy it anyway, but there are also plenty of people who simply get fooled. The economists found that people who lost money on a pump-and-dump campaign traded less frequently three years later. That suggests scams can have a long-lasting affect, denting confidence in markets for years.