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

Change Control 3 - date and time as per post.

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

What sort of a person would call someone on an investment web-site a " cry-baby", probably a moron,ah yes just read SH`s post using that very word .

Gausie, I'm not accusing MAM of running these scams but by allowing it to take place on their website, they lose credibility. Most of us feel strongly that SH is a fully paid up member of P & D Inc but Ian at MoneyAM does not ban her nor is she being investigated.

It took me awhile to figure out the likes of SH and I was very fortunate not to have invested in her 'tips' but someone new to this board can be easily taken for a ride. I agree everyone should do their research but MAM do have a responsibility towards their readers and Ian, if you have SH personal details, please forward these to FSA and let them decide.

IMHO, with access to prices, volumes, news and BB postings, MAM should be able to produce a regular (weekly?) list of possible P&D candidates.

Why bother. You are supposed to be men and women of the world and able to make your own judgements.








Why the H dis I buy the following DOGS!




The beauty of getting old is that you soon forget the pain.

This could be a useful thread if you want to find stocks that are being pumped sothat you can buy quickly and sell again before the dumping takes place. Is that the purpose of the thread?

You would be better off shorting Sue's tips Haystack.

ramu

MAM do not exercise editorial control over the BBs as part of their day to day processes. This means that the BBs are whatever we, the posters, want them to be. We shape the boards according to what we want to post and what we want to read.

It is not for Ian or anyone else at MAM to make judgements on what constitutes a legal and enthusiastic post on a stock, and what constitutes a far more sinister attempt at manipulation and fraud.

Similarly, I believe it is the policy of MAM and other similar boards to properly respect the confidentiality of the personal data supplied to them by their members. Release of such information is not a trivial matter and so is typically only released when ordered by a court of law.

In my opinion this philosophy adds considerably to MAM's credibility rather than threatens it.

So far as new users and MAM's responsibility towards them are concerned, I believe that every new member is urged to read and accept the disclaimer prior to reciving their password.

All IMHO of course

>>Haystack

No. The purpose of this thread is solely to find and identify the threads you like to haunt!

;o)

LOL

Thanks for making it easier to find them!

The entertainment value is always higher on threads for ramped stocks.

If, to properly respect the confidentiality of the personal data supplied to MAM by members who use the board for manipulation and fraud adds considerably to MAM's credibility, then all of us are better off being rampers instead of investors.

C'mon Gausie, don't you think MAM is being very one sided if they use the rules to protect fraudsters. If they cannot monitor the posts, then at least disclose suspected rampers to an appropriate regulatory body for investigation - just comparing SH's actual share transactions against her posts here will immediately reveal what she's upto.

This is like letting someone do something illegal in your household, pleading ignorance then using some privacy/confidentiality act to protect the criminal and telling the world what you did adds cosiderably to your credibility.

Enough of this Brussells bullshit!

There is only ONE share to be loaded up with at the moment and that is the cash shell called Harrier(HRR).

Harrier are a cash shell with a market cap of 4.5 million and they have the same amount of cash in the bank.
They have 2 employee's and the interest on this cash will more than pay for their salaries.
A reverse deal is due any day and the shares will rocket believe me.

Bob Morton ( Southwind) has recently increased his stake to the max allowed of 29.9%.

He is a very shrewd cookie.

Strong BUY.

Target price 50p and I aint joking.

ramu - there is proper procedure to follow.

If a complaint is made to the FSA, and they consider the complaint well founded, they are able to gain a court order for a company such as MAM to provide all of the identifying information that is required - which is substantial even on the free parts of this site.

I believe that this is the right, proper and professional way to handle such confidential data, as it protects MAM from having to decide which applications are valid and which vexatious - a decision they could easily get wrong which could have unfortunate consequences. They are in the business of providing enabling technology for traders and investors - they are not a replacement for our legal service and due process.

The FSA are a bunch of jokers and not the slightest bit interested in bulletin board gossip.

I have in the past reported "Dil" for blatant ramping and they were not in the slightest bit bothered.

F*cking great read.Perked up a VERY trying day
Al Looks like your not fancied! :-))

NML , seemed to have been pumped & dumped but it looked more like misinformation from the company itself then anybody posting on a bb.

This could have been an interesting thread:((

RogerD - First decent post on this thread. SEO probally has the most examples with PM1's 1++++ buy xmas '05 spring/summer ramping.... I think 14p was the actual.... lol

gausie in my honest opinion i wish you had this thread up and running before i got involved with cfp

i read all i could find on this share and it looked a gower to me but all it did was leave a sour taste

i was into the share and lost a few quid

its been a sore one but if i had read this kind of thread before hand i might not have lost quite as much

good thread for newbies and small time investors to read before they make investments

gausie keep it up

Every BB should have a thread such as this.

It should also be required reading for those starting out on their own investing / trading road. Unfortunately greed makes people blind and non-sensical, but once you've lost one pot, you learn. The trick is to make that intial pot small.

Never enter a position focusing on what you might make. Focus instead on what you might lose if it goes the wrong way. On most BBs, the mkt cap of most companies with threads means "all of it" is often the correct answer. If you can't lost it, then leave it in the bank!!

Finally, I read several people blaming AM or others for losses. This is not being truthful with yourself!!

Al
;-))