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

From my experience of friends who short heavily and frequently, I certainly think that they watch their positions more closely than many who are long. They usually have an exit point already in mind at the start. People who go long frequently have little idea of when to sell and often give back much or all of their paper gains.

From memory though you are one of the most filtered posters on advfn haystack,
it's not that you go short on a lot of stocks it's the way you go about it, spoiling
threads and upsetting hundreds of people in the process, i think you were the first
or second person i ever filtered when that facility came to use and what a great
tool it has been, i only hope that moneyam bb's do not turn into battlegrounds like
advfn have.

Its already going the same way , and they won't do anything about it ,,idiots coming on to good threads and spouting pure shit about other shares ,and if he says buy ,sell etc ,i only want to go on to the fun thread for a bit of light entertainment now ,, THIS IS GOING THE SAME WAY AS ADVFN !!!!

One thing is sometimes a pointer to ramping and deramping (p+D) is that the thread gets busier and the movement of the shares move from the normal trend without any News or financial updates from the companies. But a lot of "so called" news is spouted and respouted. Also the movement of the shares is not related to "overall market movment" ie. with the Dow down 200 on Friday one could expect across the board a slight drop in SPs.

I think the amount of garbage written on SEO puts it in this light. (I am a long term holder of these shares.)

What amazes me is how Ram and DeRAMpers are able to make profits on some of the smaller shares with their wider spreads and fluctuating NMS.

It seems V. High Risk for small rewards.

ravey davy gravy
I choose stocks to post on that have been subject to constant ramping and act as an antidote. I post there to give an alternative view on stocks that are often dire and heading for the bin (DLG, MMD, ELH, EVS, LGB etc) or at least are never going to go anywhere. Many investors get sucked in by the constant ramping by a small group. All they do is post absurd projections and false rumours.

It would be useful to know the number of aliases registered by posters. This can be a simple number , in parenthesis, next to the poster's name.

It is not possible to tell how many aliases people have.

A possible feature might be to add the date registered of a username to profiles.

Yes and number of posts.

ZOO is a good example of a rampers stock. It halved in price yesterday and issued a severe profits warning ("materially
behind market expectations") and they have hinted of more bad news to come. The usual rampers are already calling this a buying opportunity and talking it up.

IMO, some rampers are innocent ostriches with herd instinct looking for comfort blankets and reassurances from others.

Colin Blackbourn isn't ... he should be locked up for his antics over the past few years.

in my opinion

it would be better if mam made it clear that u could only have one id and no otheir
and if u were found out to have multiple id u would be banned from the site for life

i think that might sort the problem

also imho i think mam should have a good look at themselves and ask the question of why if your a real investor u would need more than on id

cant be hard to crossrefrence the addresses to the names

that way if ppl were ramping or de-ramping u could trace it back to the source

take the muther outside and happy slap them

just an opinion

i have shouted about a share me self but that was because i thought in my heart of hearts it was a gower as i have said in earlier post i realise now that there might have been more to it that first though

anyway onwards and upwards

ps the happy slap bit was ment a a joke u know how some pc ppl on here might take it

We could all help ourselves to some extent by filling in at least some information on our personal profiles. For example, deadfred has at least volunteered his location as "graveyard". And Dil is, apparently, in Wales, wherever that is.

ALso, the MAM messenger is anonymous, but permits an "off-bb" conversation, which can allow people to communicate civily in private

I can't think of any way in which you could track multiple aliases. You can't realistically do it by IP address (these can change dynamically at each logon, or be the same for multiple users legitimately, as through a company gateway).

I see nothing wrong with showing "member since January 2003" information, though, and that is available to MAM, obviously.

It is not possible to cross reference addresses to names. If you are talking about street addresses then you can just make up a new address each time. If you are talking about IP addesses then most people get a new IP address every time they logon to their ISP.

Some IP addresses may be generic in that there may be large numbers of people working for the same company. They will all have the same IP address. People sometimes also generate a new user name because they have lost their old password. If MaM start trying to police IP addresses and post content (where it is not abusive) then they open up a huge task. Most BBs operate on the precedent set by Demon Internet case where the company was not liable until their attention was drawn to something posted that was defamatory. They lost the case because they did not remove the item. It indicated that they would not be responsible for content per se. ADVFN operate in the same way. It is not possible to read every post and judge it for content and it would not solve the problem as the decision would be based on the opinion of the reader. The terms and conditions of the MaM BB are quite clear and set out below.

If people genuinely think the BB is being abused then they should Email MaM and report the item.

http://www.moneyam.com/tandc/investmentwarning.php

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my point

mam has no clue who is using there bb

they should

imho

On the subject of personal profiles - just had a random mooch on three posters.
I see you've scrubbed up G ;)

deadfred
How do you suggest they do it?

And would we really want them to?

I blame the Scots.

Watch it, Taff . . .