o How Pump & Dump Works o What to do if you think you may be a victim o Current Pump & Dump Suspects [DMR] o Previous Pump & Dump Suspects o Links to key posts in this thread o External Links

This thread is work in progress, is reserved for a discussion of the Pump & Dump process, and to flag up UK stocks that people feel may be currently subject to that process. The intention is to keep the 'meat' of the content in the header, which will be frequently and regularly updated from any posts made to the thread. I'll also use the main thread as a change control to record and audit updates to the header. If you have been the victim or perpetrator of a pump & dump, I would welcome your comments and stories (anonymously if preferred) as posts to the main thread. I will include extracts from them, and links to them in this header. If you prefer, you can click on my username and email me your stories through the MoneyAM internal mail system

How Pump & Dump Works

Pump and Dump schemes are a technique used by devious and immoral traders on thinly traded stocks to con unwitting and unsophisticated traders out of their savings and to make huge profits for themselves.

Candidate stocks are typically low liquidity penny shares with a history of low volume that suddenly hit the limelight when one or more energetic, enthusiastic and ebbulient posters 'discover' them and claim them as hidden gems. The usual scenario is that despite no change in the rate or quality of newsflow there is a rapid rise in volume, a disproportionate rise in price signifying accumulation and pump with little or no selling, an exhaustion peak and then a rapid return to previous levels or thereabouts, with our ebbulient posters moving on to pastures new. Price and volume usually then return to normality.

A pump and dump scheme usually has the perpetrator buying at low levels for some weeks prior to the pump stage, after which they promote the share, typically via BBs and/or mailing lists. They may buy a few during the pump and make sure everyone knows that they're buying, but they'll also sell a few more to take profits. It's the victims of the scheme who buy the shares the fraudster is selling.

When the fraudster thinks that she's unable to inflate the price any further, or has reached her profit targets, she'll start selling a lot harder. This is the 'Dump' stage of a pump and dump. She'll claim on the BBs that holders should 'keep the faith', she'll blame the shorters, she'll try to encourage people to top up and she'll promise lashings and lashings of jam tomorrow. She may buy a few and publicise the buys just to cover her tracks. But on the whole, she'll be selling.

At this point, the price may yoyo a little but the fraudster's selling is putting an overall downward pressure on the share price.

At some stage soon we get a 'race to the exit'. Some of the mugs who have been suckered in, start to realise what's happened and they too sell. The fraudster sees the sells, realises the game is up and dumps all of her remaining holdings.

The price drops, often by as much as 75% in a matter of days or hours. Those who are lucky enough to get out do so. The first ones to get out see a small profit or a small loss. Those who aren't so lucky typically leave the share certificate in a bottom drawer somewhere, determined to wait until they can get their money back before selling. Usually they never do. Some will wait forever, and have effectively lost their whole investment, others may sell a year or two later, perhaps at 1% of their purchase price.

What to do if you think you may be a victim

If you're reading this then you've already got over the first hurdle - denial. Most traders suckered into these schemes refuse to recognise that they're being conned despite warning signs that are so obvious in retrospect. A significant number remain in denial for many years after the price has collapsed and never get around to selling - a phenomenom psychiatrists call 'cognitive dissonance'.

If you've bought into a pump and dump and have recognised it for what it is, you're probably wondering what to do. Chances are, you're thinking "I can't sell yet cos its not quite covered my buy price .... just a few more fractions of a penny and I'm out".

So What do you do?

Firstly - you need to ensure that the money you have invested into the share is within your comfort zone. Ask yourself "Will I mind if I lose it all?" If the answer is "no, I'm happy to lose the lot", then play this however you see fit. Maybe you'll make some money, maybe you'll lose your entire investment.

If it's "I daren't lose it all, I wont be able to face my bank manager /partner /kids /parents /landlord/ gasman" (delete as appropriate) then you need to take a long hard look at the way you trade, and you *must* reduce the size of your holding to the level where you don't mind losing all of what's left - even if you have to take a small loss on the tranche that you sell. Bad tasting medicine, I know, but infinitely preferable to the alternative. Get yourself onto a risk management course. I would expect www.glomtc.com to run courses along these lines.

Although pump and dump schemes are illegal worldwide, succesful prosecutions are rare and almost non-existant in the UK. The highest publicity case in the USA related to a 14 year old boy who was eventually fined more than $250,000 having made much more than this through using internet BBs and spam mail to promote and then dump his penny stocks.

The highest profile UK case was probably the Daily Mirror City Slickers scandal that eventually came to court in November 2005. The court heard that Piers morgan bought 66,000 worth of Viglen shares the day before the Mirror tipped them. James Hipwell also bought 36,500 worth which he sold at 9.00am the next day for a profit of almost 20,000. Also tried was a BB Poster whose real name is Terry Shepherd - he was accused of forming part of the conspiracy.

Trade suspect shares if you must - but keep your wits about you.

Current Pump & Dump Suspects Dimension Resources - DMR

EPIC: DMRName:Dimension ResourcesCategory: Illiquid Penny ShareNMS: 3000Current Phase: PUMPAccumulation Started: Around July 2005Pump Started: Late October 2005Dump Started: Awaiting Data

Previous Pump & Dump Suspects

EPIC: CFPName:City Financial associatesCategory: Illiquid Penny ShareNMS: TinyAccumulation Started: est Jan 2004Pump Started: 31/03/2004Dump Started: 28/04/2004Maximum Loss To Victims: 81%

Links to posts within this thread Posts 2,3 and 4 on page 1 of this thread are typical indicators of the pump stage of a pump and dump scam. The scammer cross-posts buy recommendations for their stock on multiple threads, and points to their previous pump and dump scams as successes. Naturally, they only mention the low (where they bought) and the high (where they exited). The victims bought at those highs and will probably never see those prices again. Those victims have been well and truly conned out of their money, and many will never realise how and why they were deceived. External Links SEC Article Wikipedia 14 year old fraudster Investopedia link

TAD has been P&d for 20 years now.

Another rule for the P & D maestro. If anyone asks you a difficult question, ignore it, abuse the questioner and finally try to move them away by disrupting a thread on a share they are long on.
See todays DMR and SEO threads for a master class.

desperado hewitt...after ur antics on the DMR thread.

Simple facts SH.
Rattled, definitely rattled.
And very very easy.

No hewitt....u were rattled so u had 4 of your friends join in with you.....why the hell should I be rattled......I;ve just had the more good news in that IC have tipped DMR as a buy yesterday.

Dontcha just love it????
4 friends?
Gausie I have never communicated with other than once on this thread.
Chocolat and I disagree on many investment issues and Blinger and I have squelched each other!!
Get a grip with your conspiracy theories.
very VERY easy

Get a grip hewitt...yes I will come this time next week.....I know which corner you'll be hiding..

I refer you to the post where I wished you the best of luck if what you forecast is true. I will have no need to hide. If you are wrong, you will.
Still waiting for an answer by the way.
I will keep asking the question.

hewittt.....I'm waiting for lots of answers first....I never provide answers to those sad individuals who have already made their mind up about something before you can even say something.

idiot.

i know my speeling is bad, but your maths is worse. whog up 700% my bottom! no wonder u live in cloud cukukoo land.

Kivver has just totally lost it in the last few weeks it seems.

"I never provide answers to those sad individuals who have already made their mind up about something before you can even say something."

Classic - should go in the header, Gausie.

Please can nebody tell me where a 700% rise in whog could have come from following sh's posts 23dec 2003. she/he/it has been posting telling everybody following her tip we missed out on a 700% in the shre price.

Kivver: do you mean this WHOG??

If you look, very carefully, just at the end of December 2003, something seems to have pumped this one up a bit, albeit hardly 700%. Sadly, it seems have declined to a mere shadow of itself very shortly after. Seems that it was, well, er, sort of, umm, dumped.

My best buddy, blinger can probably explain. He shorts a share at its very bottom, it never drops lower than that and he claims massive profits from trading it.
I know hes kind of the opposite from what the thread is about, but his mathmatical slant may help explain the missing 600%.

thanks boys, i think we all know where sh is coming from.

CW. this week MFI , LLOY today

MM, It was Hoodless Brennan getting people in. Bloody rubbish, I sold soon after thank god !

How you can put LLOY and sue helen in the same breath is beyond me. LLOY has been worth it for ages just for the divi. Today's rumours will certainly bring in a few spivs though.

Can we have NWG tomorrow? It's the only utility not pushing new highs every day and I've got bundles of stock