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brig

12/03/13 2:19 PM

#4303 RE: pgleba #4302

Don't trade promo's

janice shell

12/03/13 2:20 PM

#4304 RE: pgleba #4302

There isn't really a foolproof way of avoiding one, because sometimes--though rarely--pump and dump scammers descend on companies that aren't interested in their services. That's pretty unusual, though.

In this case, there wasn't a promotion; just insiders who wanted to create a buzz so they could dump.

There are two main things to look for. The first is shady management, or management that's impossible to identify with any certainty. The latter was the case here. Who's Plekhanov? Who's Sushchenko? Do they even exist? Vadiim Anikeev presumably does exist, but he's a very shadowy figure with interests in Cyprus, which is not a good thing.

The second is hard to identify individuals or entities holding very large amounts of stock. Those people will want to sell at some point, and so they'll try to pump the stock price and the volume in order to get out. For them, the price is less important than the volume, because they got their stock either free or very cheaply.

In order to get the volume they need, they'll have the company start putting out a lot of press releases. Usually they aren't as over-the-top as Far Vista's were. And usually they do engage promoters to help out with volume. That didn't happen here. In a sense it made the SEC's job easier, because there was no doubt that the company was behind the hype.

DragonBear

12/03/13 4:23 PM

#4305 RE: pgleba #4302

What is a fool proof way of avoiding a pump and dump?

Avoid any OTC stock not piggybacking off a major exchange. Example: Stock trades on the TSX in Canada, and on the OTC in the US. That eliminates 99% of the microcap stocks.

The only other way is to not get caught in one after the P&D occurs. As Janice outlined, if you have a ton of stock in the paws of management and affiliates, then it's a stock promotion waiting to happen. As an exercise go back, and review your own thoughts as the P&D unfolded. Then review the OTC filings as though you're not invested in the stock, and see if you can find the red flags. It might help in the next P&D stock.