Pump and Dump is a phrase that often refers to one of the traditional business practices used to manipulate markets and bilk investors. 1. * Fraudsters buy shares in the target company, usually one that's little known. 2. * Fraudsters put out false information pretending the target company is worth more than it is. 3. * The share price goes up if investors believe the lies about the target company. 4. * Fraudsters sell their shares in the target company for more than the shares are really worth. Then the share price goes down. 5. * Ordinary investors are left with something worth less than what they paid.
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