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

Accumulation Started: Around July 2005

O No Gausie...the above is incorrect...I bought my 2.0 million shares in DMR in October and I purchased 420,000 shares at the current displayed offer price only last week.

Ooops is the word Gausie.

SueHelen currently has a favourite turn of phrase that involves invoking her adversaries to remove their rose tinted spectacles? Now there's a thought. Seems to me she's relying on likely victims not to remove theirs.

ELH - a failed attempt on SueHelen's part, of some interest to me, as I did trade it once upon a time between 80/70p, long before she ever got on the case. I lost money, all my own fault - I thought it might have another bash at 100, purely on a TA basis - and I should have known better, being in the electronics industry myself and having observed the decline and demise of various suppliers/contractors in recent years.

http://www.moneyam.com/InvestorsRoom/posts.php?tid=6354#lastread

From the outset SueHelen berated Haystack's calm and polite expressions of his views on ELH with considerable venom. It's not a long thread, so read it - her assertions beggar belief.

So far, and despite several times of asking, SueHelen has failed to explain posts 67 and 75.

"Haystack - 04 Aug 2004 12:09 - 66 of 114
ELH is still falling fast. It is hitting new all time lows day after day. The rate of fall has even increased.

SueHelen - 04 Aug 2004 12:31 - 67 of 114
Good call Haystack but I am going onto hang onto mine as I feel the company will get back on track in the future. My indication now is that these are a long term hold.

SueHelen - 08 Nov 2004 18:10 - 75 of 114
Hi Xmortal, I don't hold these anymore after taking a loss by selling out at 4.00 pence levels back in July.

I am neutral on these for the moment, there is a very large overhang here at the moment so until that clears the price will stay like this. The overhang was created by Fidelity selling around 79 million shares at 1.00 pence about six weeks ago. Hence, the real prices are about 1.75 to sell and around 1.77 to buy.

I am keenly following the developments though."

Business Focus

The dotcom boom is back. Will it last this time?
Less bubble less squeak. The web is now in the hands of big players less likely to get caught in the mouse trap

By : Tony Glover - Technology Editor January 22, 2006

THE GROWING NUMBERS OF investors convinced the dotcom boom had returned got the fright of their lives last week. Their nightmare started when a little- known Japanese internet company, Livedoor, was raided by Japanese investigators last Monday. So overwhelming was the panic caused by the news, which added to worries about oil prices, that the selling of Japanese technology stocks forced the Tokyo Stock Exchange to close its doors for trading for the first time in a generation.

The Nikei 225 Index fell nearly 6% on Tuesday and Wednesday. Fears that the good run in technology stocks over the past year might be about to come to a painful end quickly spread to Wall Street and other markets. The Dow fell 213.32 points or 1.96% to 10667.39 on Friday erasing all gains for 2006. It was the worst session since March 2003. The S&Ps 500 shed 1.83% to 1261.49. The Nasdaq slumped 2.35% to 2247.70, its biggest decline since August 2004 as the markets succumbed to mounting fears about earnings.

By Monday, it is likely that traders will have relaxed and reverted to their previous belief that a new tech boom has just started. But for all investors, the events of last week raise a fundamental question which demands an answer: will the new dot.com era last or will it turn into a bust like the previous one, wiping out hard-earned savings and dashing the hopes of millions?

This is an especially important question in Japan where share prices in Tokyo surged by 40% last year. Livedoor had been a favourite stock among small investors in Japan. Investors panicked on hearing that the company was being investigated by Japans Securities and Exchange Surveillance Commission. Its offices in Tokyos Roppongi Hills were raided after allegations that it had mis-stated losses from its 2004 results and spread false information to boost its share price. Television pictures of the raid were flashed around the world, spooking investors.

Frightened Tokyo brokers stopped accepting Livedoor shares as collateral and demanded that investors cover their trading positions with cash. As clients were forced to sell in a falling market, other technology stocks were dragged down.

Japans dotcom flu soon started to mutate into a global pandemic. Lower-than-expected profits from Yahoo and Intel last week were seized upon as evidence that tech stocks were in deep trouble.

News of good earnings from two other technology darlings, Apple and eBay, were also viewed with suspicion by investors; even Google, the worlds favourite dotcom stock, suffered. The Wall Street Journal, although noting that Googles profits are still climbing and that analysts are generally upbeat about its prospects, added this warning to its report last week: But few investors are focusing on the growing number of restricted shares and options that Google is handing out to employees which will emerge as a sizeable expense in the next few years.

By the end of the week calm had partly returned in Japan. The panic was over and the consensus among analysts was that investors had over-reacted to the Tokyo crisis. By Thursday, the market was even able to keep its poise even after absorbing disturbing news that 38-year-old Hideaki Noguchi, a senior adviser to Livedoor, had been found dead in a Tokyo hotel. The Nikkei Index recovered around 2% with internet and technology stocks leading the way.

But there were plenty of scars left -- and in the US at least the worst was yet to come. The first signs of trouble ahead was when Yahoos share price fell by a hefty 12% on news that fourth-quarter earnings had missed analysts average estimate by 1 cent a share. Earnings had come in at 16 cents a share against the 17 cents expected, hardly a disaster.

Far from being a dotcom promise that was not delivered, Yahoo had managed to grow annual revenues by an impressive 47% from $3.6bn (2.1bn, E3bn) to $5.26bn over the year and its profits had risen by 126% from $840m to $1.9bn. Figures like these would normally be a cue for celebration and for sending the stock flying to new highs, rather than provoking a sell-off.

To some sellers Yahoos latest figures were interpreted as an indication that the stock may have reached, or be nearing, maturity, another way of saying that growth rates on this scale cannot last. Growth is certainly slowing: Yahoo doubled sales between 2002 and 2003 before tripling them in 2004. But Yahoos decline was only a taste of things to come. On Friday, Googles share fell 8%, leading a severe decline in the US markets on fears about earnings, energy prices and just about everything else. With a bit of luck, the markets will recover this week but questions will continue to be asked about the durability of the current boom.

The most bullish analysts argue that the recent resurgence of the technology sector has several features that distinguish it from the late 1990s boom and subsequent bust. At that time the internet, e-commerce and web publishing sectors were untested concepts. Young dotcom entrepreneurs convinced venture capitalists to back their business plans. Because few investors understood what they were up to, a brash culture arose that declared it was creating new economy stocks.

The Nasdaq, which lits shares of technology stocks, has doubled since October 2003, but is still only half way to the heights (5132.52) of October 2000.

US interest rates have been rising steadily but there is lots of cash in the US parked in real estate that has not yet migrated into shares. Higher employment has returned to Silicon Valley (mostly in software), though there are still a quarter million fewer tech jobs from the 2000 peak. Attitudes have changed. A survey by the Kaiser Family Foundation showed Silicon Valley residents now prefer salaried jobs with established companies, rather than huge stock options with risky start-ups.

Another indication Silicon Valley is more mature is the increase in spending by American venture capitalists, 25% of which ends up in Valley firms. A total of $4.21bn in venture capital was invested in the Valley in the third quarter of 2005, compared with $6.09bn for all of 2004.

In 2000, in a blind frenzy, investors poured $30bn into thousands of dotcom start-ups. Virtually none of them made a profit. By the end of 2001, an estimated 80% were out of business. Tens of thousand jobs were lost and $2trillion in share value wiped out. The tech sector has revived since those dark days and the current boom has a different look, the most notable being that mergers and acquisitions have become the way for start-ups to cash out, rather than initial public offerings (IPOs). VCs are looking for fundamentals not visionaries, cashflow more so than hype.

Harry Dent, an economist who predicted the last tech boom and bust in his 1992 book The Great Boom Ahead predicts a bigger boom growing over the next five years. But there is a sting in his tail. Dent sees the Nasdaq rising to 13,000 (it is now at 2,258) by 2010. We see a broader tech boom, including biotech, resuming now that were over this crash, he told an interviewer at Wired.com, another survivor from the last crash.

Businesses have cut costs and expanded their ability to grow with past investments. Now, businesses are going to have to catch up and reinvest to keep up with consumers, who never stop spending. Businesses will come back big-time, and that money largely flows into information technology.

Dent, however, predicts a crash at the end of 2010 worse even than the previous one in 2001. He says this is largely because there is no large Baby Boom generation coming up to pick up consumer demand, which he attributes to the tech revival. Youve got a smaller generation following the largest generation in history, Dent said. Rather than thousands of start-ups, the current rebound is confined to established online advertisers such as Google, Yahoo and AOL, electronics firms such as Apple, as well as biotech, telecoms and software developers.

It is more isolated than last time, says a leading analyst. [The rebound] is not insignificant, but it is in smaller pockets.

The market still sees Yahoos big rival, market leader Google, as the leading internet growth stock. Most analysts believe Google is firmly in a growth phase, while conceding that its shares are highly valued. Google trades at roughly 90 times current earnings. By contrast, Yahoos shares trade at around 60 times earnings. But analysts believe internet stocks like Google have room for faster growth than non-tech companies. According to Cyrus Mewawalla, analyst at Westhall Capital, internet companies have substantial growth potential while traditional telecoms stocks are overvalued. There will not be overall growth across the sector. Already, clear winners and losers are emerging. Telefica, for example, probably bought O2 at the top of the market.

The bottom line is that telecoms operators like Vodafone derive about 80% of their voice while internet players such as Google [and now Tesco] are starting to offer voice [telecom] services on the web that are virtually free, said Mewawalla. Internet stocks are set to benefit from customer losses that will severely impact traditional telecoms operators.

France Telecoms profit warning earlier this month was attributable to loss of business to internet-based services and evidence of a shifting power base from old communications suppliers such as the former national telecoms operators to the internet-based economy.

According to a survey, 592,000 France Telecom customers ended their fixed-line contracts with the phone operator during 2005 six times as many as the year before.

The survey also revealed that 2005 saw a spread of alternative phone operators, with a further 2.23m customers switching to other operators for the internet and other services, but retained a fixed-line contract with France Telecom.

Ian Lobley, a senior partner in 3is venture capital business, said he believes the balance between old and new communications players will shift dramatically during 2006. Investors will start to find companies roles increasingly confusing during the course of the year, predicts Lobley. We are already seeing TV companies selling phone services and phone companies becoming TV companies.

Overall, the view is that todays technology sector is different from the dotcom bubble seven years ago and that the boom has barely begun. JP Rangaswami, global chief information officer of Dresdner Kleinwort Benson, says the internet is entering the second stage of its evolution and that the medium, like the early days in Hollywood, is only just

at the Keystone Cops stage of its development.

Speaking to entrepreneurs in London recently, Julie Meyer, founder and chief executive of Ariadne Capital, an early business development adviser of internet voice specialist Skype, was bullish about prospects for 2006. She likened the recent evolution of the internet as comparable to other periods in history that brought about sweeping social change.

One venture fund manager attending the event said: The buzz is just like it was at the start of the last dotcom boom. We are only at the start of the next cycle 2006 is going to be an incredible year.

"SueHelen - 22 Jan 2006 22:06 - 21 of 25
Scrip....that is not the intention of Gausie that's the problem. The cry baby has been deramping DMR for weeks and whilst he's being doing it continously the price has been rising...in fact risen by 100% and much more to come. Because his deramping has not worked the cry baby has become so desperate with his deramping that he has started this thread now aimed at me.

Cry baby Gausie...I say cry baby.

People who don't have nothing better to do set up these kind of threads.....Go back to work Gausie."


Paranoia, poor spelling and terrible grammar all in one very short post.

Al
;-)

You don't say Big Al.

i'm afraid i've got some news regarding the true identity of suehelen. she is really mr. hanky. (cf proof below)



looks like a piece of sh*t with a santa hat to me.

Gausie, I feel your thread is having the right effect. I wonder if it can be kept at the top of the board.

Another share which I think is being ramped and deramped at the moment is SEO.

Freds post raises the question of definition. While the SEO thread does, and has, suffered ramping and deramping, it has also contained much intelligent debate and reporting from individuals who are most certainly not rampers /derampers.
I myself hold SEO and do not consider myself to be easily drawn on investments. Yes the share is risky, but I consider the downside (with a stop loss in place) to be worth the risk when the potential is considered. That does not make me a ramper, as my posts will testify. What that thread, and many others suffer from is over enthusiasm from the investors, which is naturally countered by those with the opposite position.
While I support moves to oust those who manipulate for their own gain, I think we must be very careful not to paint enthusiastic posters with the same brush. BB's are about opinion, with which we agree or disagree. To say anyone supporting a share is manipulating, or anyone posting the opposite is bashing, is a nonsense that would inevitably lead to all posts being a luke warm version of the caveat the FSA make investment companies put on their adverts.
Just an opinion, but yes, let us oust the manipulators for the sake of an excellent investment site.
Alan

Alan, I agree. This thread needs to retain its credibility by being careful not to cry wolf.

I'm looking specifically for the low liquidity penny share with a low volume history that suddenly hits the limelight when one or more energetic, enthusiastic and ebbulient posters 'discover' it and claim it as a hidden gem. 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.

If you spot candidates anywhere within this cycle, please post them here.

Gausie,

Efforts appreciated. Very useful reminder to consider again our reasons for buying or selling those shares which may or may not be good to buy/hold.

Would be happy to contribute only if I know how to spot a pump-and-dump with some degrees of confidence!

Change Control 2 - date and time as shown on this post.

Modified header to include content from post 31.

Gausie, excellent thread. This is very good and something MoneyAM should have done ages ago. I think it's about time FSA made financial bulletions accountable and have a responsibility towards it's readers. If a newspaper were to run a P & D scheme, every watchdog will be crying foul.

I hope I am wrong but I suspect VML was used for P & D. Also, I suspect CDN, IDD and IQE may have been victims of this scheme. Good luck with your research and many thanks for this thread.

Thanks Ramu - will take a look at all four later.

For the record - it's certainly not MAM who run these schemes. MAM is a terrific resource for like minded traders to swap strategies, approaches and observations. This thread is exactly the sort of thing that MAM was established for.

Sadly, there are a few posters out there with entirely different agendas. These are the agendas we're trying to weed out.

It's interesting that almost all posters to this thread have been positive and supportive. I wonder what's on the minds of the one or two who so forcefully and vociferously oppose it?

G

Sentiment is great, hope people read this thread before choosing investments.

Good work!

Excellent Gausie-the following may be of interest

Topic EPIC Started By Last Poster Updated Total Unread IR TR
Dimension Resources:Made of Stone-Current Price 0.23 pence-DMR's Stone Deposits would put a value of 5.00-6.00 Pence. DMR SueHelen Dil 23 Jan 2006 10:51 1042 Y
IQE - The World's Leading Merchant Epiwafer Supplier : Exciting Times Ahead IQE SueHelen Andy 21 Jan 2006 12:31 295 Y
Warthog Looking to the future !!! WHOG SueHelen mtwallit 19 Jan 2006 08:35 1414 Y
Cheerful Scout: Cheerful Times Ahead-Current Price-0.60 Pence-Operating in an 'explosive' market right now. CLS SueHelen SueHelen 16 Jan 2006 21:58 72 Y
Depressed PGM Prospector Primed for a Comeback? - aims to defy its dismal record of share price performance over the past few ye RDG SueHelen jameel06 16 Jan 2006 21:52 12 Y
Enition - Featuring in an interesting reverse takeover deal - opportunities in the Energy sector ENT SueHelen jameel06 16 Jan 2006 20:42 50 9 Y
Enition - Featuring in an interesting reverse takeover deal - opportunities in the Energy sector ENT SueHelen SueHelen 14 Jan 2006 14:19 4 4 Y
Has anyone bought the Daily Mail Newspaper Today ???? ENT SueHelen SueHelen 14 Jan 2006 13:04 2 Y
Caledon Resources-In the hunt of multi million ounce gold projects. Going Cheap! CDN SueHelen lanayel 09 Jan 2006 13:42 757 Y
Eurodis Electron - The Bounce Back Up is about to Happen... ELH SueHelen Scripophilist 08 Jan 2006 09:53 114 6 Y
Profile Media Looking to the Future !!! PMD SueHelen moneyman 06 Jan 2006 18:43 479 5 Y
British Energy - One in a Lifetime Gamble Opportunity. BGY SueHelen ahoj 05 Jan 2006 11:00 303 303 Y
QuikTrak - Radiolocation & Messaging System.....Price has reached the Bottom. QTR SueHelen Dil 04 Jan 2006 19:33 702 6 Y
PNC Telecom - Big Gains on the Horizon for the Brave. PTC SueHelen squidd 22 Dec 2005 05:15 54 11 Y
Documedia 10 Pence Price Target !!! DOC SueHelen SueHelen 18 Dec 2005 17:57 44 44 Y
Mano River Resources - DISCOVERY OF DIAMONDS........KIMBERLITE NEXT !!! MANA SueHelen nkirkup 13 Dec 2005 09:09 77 77 Y
Brainspark - Technology Start-Up Incubator : Boom or Bust ??? BSP SueHelen katcenka 21 Nov 2005 17:04 151 35 Y
CFA CAPITAL - EXCITING YEAR AHEAD DGT SueHelen EWRobson 09 Feb 2005 13:28 1892 Y
Net b2b2 PLC NEB SueHelen Golfclub12 03 Feb 2005 08:28 154 Y
Reflec (Time for a breakout )!!! REF SueHelen gordon geko 01 Dec 2004 13:09 51 51 Y
PC Medics Group - To move into Profit. PMG SueHelen Still Waiting 29 Oct 2004 19:23 38 38 Y
DE-RAMPERS ( ) SueHelen AdieH 16 Jun 2004 11:25 57 Y
Black Rock Oil & Gas - Next African Gold ??? BLR SueHelen xmortal 10 Mar 2004 16:37 26 26 Y
Chelford Group Well Placed!!! CHR SueHelen Tech 28 Jan 2004 14:58 55 Y
Scipher Looking to the Future !!! SIP SueHelen moneyplus 23 Dec 2003 18:48

Who is the second person G?

>>jemadi - I think I can guess where that list came from. I'd sooner this was a rational look at all candidate shares rather than a witchhunt. It may end up with the same conclusions, but let's leave any conclusions until we have a significant number of analyses, and let's try to stay objective.

>>choc - there's bound to be one sooner or later. I hear rumours that some posters have more than one alias. Ian at MoneyAM has been unable to deny these rumours.

Try a search on QTR , excellent example of pump , dump and lies.

Can't remember who started it.

Thanks Dil - will take a look.

Change Control 3 - date and time as per post.

Added Investopedia link to 'external links', as posted by Snip on DMR thread. Thanks Snip.