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Investors lose billions on US penny stocks as 'pump and dump' scams multiply

25 points

by pseudolus

6 hours ago

| past

| 5 comments

| ft.com

| HN

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snapcaster

2 hours ago

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I feel like if people could just ask themselves some basic questions like "why is this person offering to give me money for free?" 90% of scams would disappear.

It's so frustrating how people see someone claiming to have made tens of millions trading crypto or whatever selling a course for $1000 and not immediately question why they would be doing that

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nradov

2 hours ago

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Sure, but a significant fraction of scam victims are older people suffering from cognitive decline who are losing the ability to ask themselves basic questions. Scammers have a long window of opportunity between when this mental condition starts and when relatives or government authorities establish some sort of financial conservatorship to protect them. This problem will only get worse with an aging population.

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pseudolus

6 hours ago

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https://archive.ph/JHkL9

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tryptophan

2 hours ago

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Scams are allowed but if you want to raise money for a new real company the stock markets are just not an option due to costly regulations.

What are we doing here now.

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nradov

2 hours ago

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The public stock markets were never intended to raise capital for new companies. Companies usually have to have at least some track record before an IPO.

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longtimelistnr

4 hours ago

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1-800-522-4700 for anyone humoring these kinds of "investments"

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pavel_lishin

2 hours ago

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Amusing and true.

> The National Council on Problem Gambling operates the National Problem Gambling Helpline Network (call: 1-800-522-4700)

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nullc

3 hours ago

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It's common for pump and dump to be extremely obvious. The reason for this is that many-- in some cases, virtually all-- of the victims/targets are aware it's a P&D and they believe they're going to get out early and leave some sucker holding the bag. In reality, they're the sucker.

Articles like this that discuss the subject and show graphs of spectacular rises without mentioning that people who know its a P&D are frequently among the victims might contribute to the problem. ... While some readers see this and can now recognize a P&D some of them are looking at that graph and thinking "when I next see a P&D I'll join in and exit >>here<<".