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Saturday, June 12, 2010 1:03:44 AM
Share dilution scams
A share dilution scam happens when a company, typically traded in unregulated markets such as the OTC Bulletin Board and the Pink Sheets, repeatedly issues a massive amount of shares into the market by no justified reason, considerably devaluing share prices until they become almost worthless, causing huge losses to shareholders. Then, after share prices are at or near the minimum price a stock can trade and the share float has increased to a unsustainable level, those fraudulent companies tend to reverse split and continue repeating the same scheme.
I guess all the existing shareholders are doomed, unless something happens to DM such that he is no longer in the management.
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