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

Tonker.

No doubting his charting skills but anybody can cut and paste charts
and bollinger bands and in a short space of time anybody can learn how
to read them, i'm posting for the benefit of anybody who might believe
all his posts, the stocks are pumped and dumped, look at the reaction and
abuse i get, i known this poster for almost 10 years now, he used to flog
his stocks on every website going, again if the stock is so wonderful and
will be so much higher soon then why is he promoting it on so many sites
and threads ?

Well i will be more careful of him from now on.... I got fooled into buying DMR shares last month by the SueHelen thread... I will be more careful from now on, and am starting to know names i can trust ( ie Kivver)... Will hopefully be able to sell these f***king DMR s on this ramp.... hate to say it...

Its a bit silly having to have this thread at all , if you go on the internet and buy shares because some people under assumed names are tipping them ,,then you only need half a brain to know that your going to come unstuck. For someone who doesn't know much about the market ,the best thing to do is ,buy some tip sheets , buy the Financial Times , read the mags/ newspapers ,listen to the news , and you will slowly form your own opinion and probably earn a few quid .

Finally advfn's worst ever spammer, that's the nickname bitterlemontart,
who was first banned as absolute returns and then sweet cherry pie is
pump and dumping EO.
This poster is easily the most filtered poster on advfn but continue to spam
thousands of threads on a weekly basis and if banned just starts again with
a new nickname, best for advfn not to ban him and then everybody can filter
him as i have and then you wont have to put up with his crap ever again, please
please be warned about this poster, a serial spammer

jimmyb.

But newbies will always fall for it, i used to believe everything that was wrote
on the internet when i first set eyes on it, i still do have a elite list of posters
who i trust and respect, can we not try and help others who are new to the
game ?

Its never going to be that way ,(unfortunately) ... I didnt fall for it gravy ,i was always my own man ,i just lost money out of over confidence until i learned how to be patient .Like you ,i know some good people on these threads ,but it is a minefield ,however one ive never fallen for .

Ravey,

Thanks for your reply, and I agree there has to be a thread to expose what is going on, otherwise newbies may fall for the patter, and end up poorer for it.




Jimmy B,

Whilst you have had the sense not to fall for the pumpers and dumpers, sadly a great many people do fall for their patter, and end up losing hard earned money as a result.

if this thread saves one person from losing their money needlessly, it will have been worth it IMO.

Very true ,Andy .

Quite interesting with Zrl.

I wonder when the poster gagner2006 will actually realise that A: they are
totally wasting their time and B: they do more harm than good because nobody
will touch the stock because it's getting ramped on a well known pump and dump
thread "unbelievable it's under 25p"....not one buy today and 3 small sells.

lol

I am sure Warren didn't make his fortunates in a hurry and by following tips
... unless not without doing his own diligence.

ravy and andy fully agree with you (sorry jimmy b a poster who i really like) there is an absolute need for a thread like this to help the newbies to share investment well informed or at least offer them some advice they would like to take.

Well said axdpc, slowly changing my philosphy to that of longer term investing, but will always keep a samll percentage for momentum investing and oversold shares. Apart from kmr the best stocks i have held over the last 3 years have been tesco (now sold) and national grid in terms of growth and dividends. Hoping for the same from royal bank scot and Corus over the long term.

IMO, penny share "tips" given out freely on public BBs are bit suspect. If it is such a sure thing for 20, 50, 100 fold returns, then the tipper(s) would have tried to cleaned-up, raising enough money by borrowing, remortgaging, ... Perhaps enough to buy the company. Genuinely worthy buys would appear in news and public BB's only AFTER company insiders, business partner and associates of friends, relatives, people with the appropriate race/religion/class/clubs ... have had their fill.

For some real life, closer to home analogies, ... just take a look at one's own work place and see who creams the perks and who does the works and who take the risks then listen to the fancy-wored speeches ...

The alternative is to buy, in equal amount, ALL tipped shared and hoping one of them will give a big enough return to offset all other losses ...

Back to Zrl.

Not one buy so will that poster realise that not one person
takes any notice and now the price is down on 100% selling,
i wonder which trade was their's :-))

DMR.

All sells there but that will never stop the ramping of this stock
by suehelen.

Iqe, no profit for anybody buying into that, basically the only thing that
can make punters a profit if they fall for the spin is some good news to come
out which means it's all down to luck.

also look for 'definates' and not 'maybes'. kmr are definately building a mine, will it work? will it be finished, will there be an earthquake? questions to be asked. exploring companies should hopefully find something but equally they may not. look at bowleven (blvn).

This has made me chuckle with the nerve of the guy !

gagner2006 - 14 Mar'06 - 09:38 - 1778 of 1778


"No Oz is showing flat but down a little bit when you look at the buy-sell price movement.

I have sold out my remaining interest in Carpathian. Decided to transfer in to ZRL (which is slightly down thus far) due to the Uranium news recently"

If you check out recent UPS threads from advfn Carpathian according to gagner
was the best stock in the world.

Kivver,

I hold KMR.

Some "definates"

Seimens are laying the power from the national grid to the minesite, under a strict penalty clause, completion June 2006. Work is 90% completed.

Mine is well under construction, as a visit to the photo gallery on the website will confirm.

There was a small earhquake in Mozambique a couple of weeks ago, but no effect, and it's not a known area for earthquakes.

No damage done to the mine, not even a tremor there, and they have single storey buildings anyway, a little way from the beach.

Protected by Madagascar for sunamis.

60% of production pre sold.

Minerals are in the sand on the beach, they simply dredge and process.

Looks good to me, I intend to top up and hold for the longer term.

im with you andy, got 3 batches (18, 28 and 38p) and not sold one. Thanks for putting the information down. Thats the kind of share i like, none of this 'there sould be news soon' sort of stuff. There are never any guartantees but this looks as sure-fire as it can be. good luck to us and any other holders.

For a start SUEHELEN is 100% male . l happen to know people who know him . And over the years had one followed his investment strategy would be utterly bankrupt . Dont forget brokers/ MMs employ respectable city publicists who in turn employ less scrupulous boiler room fiscal institions to spend all day on either the telephone/ unsolicited correspondence / and now the best of the lot via the lnternet ramping/ deramping a particular stock especially volatile momentum stock . Sadly now individuals have caught onto the action via the internet BIGTIME ; and the rest speaks for itself ...For all is not as it seems on the LSE ...Je vous previens !!!!!!-Mefiez vous des apparences ..{ Be warned !! No MATTER how plausible and individual may sound always be very careful of appearances ! ........One of the worst "pump and dumpers " of recent times were NML ,TMC, and ARX -and to a lesser degree SEO ! which was ramped up to 30p ..Some of the ramping on SEO was so blatent it was hard to stomach . ..................My advice ? By all means get basic hard news from the FT or periodicals like IC { LOL } or "Shares" or Money weekly " BUT !!!!ALWAYS Do ALL your own RESEARCH,,,...,., READ , READ , READ .lf you havent got time your in the wrong game ...and if you have got time all your work pays of quite handsomely AND you can sleep at nights . You would be horrified as to the number of people who dont even check simple facts from complete strangers who wax lyrical about a certain stock . Avoid the likes of Capital assets , City equities and the ilk .But knowledge empowers so do ALL your OWN work .ALL of it !!! } And switch of your computer after making your position smugly thinking "HOW MUCH will i make on this one trade rather than having blindly following the herd and wondering which direction it is it headed . You ever seen buffalo on the move for patures new .Thats kamikaze trading ..Believe me ; Nothing comes easy in this game until YOU apply yourself 100% .{Although certain quaters entertain that notion } >>En brevite ,,,Dont lose your shirt to what after all is mere smooth talking , easing with confidence, little junior snot offering you all sorts of returns on a stock his gaffer has instructed him to sell ,,,>>,,,,.MY holdings ? Junior oil and select hard / soft commodoties plays for now / ,, Bonne chance ,,,,,,,,,@+ J,,,,,,,,

TFC,

Ok, any more clues?