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What is Pump & Dump?

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What is Pump & Dump?

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My stock broker at Wachovia Securities filled me in on all the details, then gave me the name and number of a trusted contact at the Securities Exchange Commission (www.sec.gov) so I could gather more details. The SEC is the government watch-dog for the world of stocks — to protect the investor and maintain orderly market activities. (Read More.) According to the SEC, “Pump and dump” schemes, also known as “hype and dump manipulation,” involve the touting of a company’s stock (typically microcap companies) through false and misleading statements to the marketplace. After pumping the stock, fraudsters make huge profits by selling their cheap stock into the market. (Read More) It is not known, and extremely difficult to determine who the crooks are — whether it’s the company offering the stock, friends of the company, or unrelated criminals just pumping new emerging companies. According to the SEC, it could be any or all of these perpetrators. When the Pump & Dump scams are delivered a

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