The Great American Pump And Dump Fraud
Politics / Market Manipulation Mar 04, 2009 - 07:02 AM GMTBy: David_Haas
Here is a useful definition straight from the Financial Industry Regulatory Authority (FINRA) web page which describes several different types of scams investors need to be wary of.
This scam, the “pump and dump”, has been around forever and anyone who's ever been involved in investing has heard about it. What people may not have considered is how large such a scam could feasibly grow if enough “special interests” were to get involved in a coordinated fashion.
Here's the FINRA definition:
Pump-and-Dump — in which a fraudster deliberately buys shares of a very low-priced stock of a small, thinly traded company and then spreads false information to drum up interest in the stock and increase its stock price. Believing they're getting a good deal on a promising stock, investors create buying demand at increasingly higher prices. The fraudster then dumps his shares at the high price and vanishes, leaving many people caught with worthless shares of stock. Pump-and-dumps traditionally were carried out by cold callers operating out of boiler rooms, or through fax or online newsletters. Now, the most common vehicles are spam emails or text messages.
These fraudsters would, of course, not be expected to simply “dump their shares” but they would also likely build a massive “short” position to enable further profit from the wholly-predictable crash that inevitably follows such an operation.
Here's my question: What do you call an operation where high-level financiers and government overseers maliciously “lock-on” to an entire country and orchestrate a similar strategy as the classic “pump-and-dump” described above, through a carefully controlled and coordinated manipulation of government policy, data, and information, the mass-media, tax laws, central-bank debt creation, free-market destruction and privatization (monopolization) driving the systematic dismantling, unbundling, and liquidation of the nation's productive asset base - extending the “pump-up” phase of the operation through 7 presidential terms?
Isn't this PRECISELY what's been done to our country in the 1982 - 2007 period?
Now that you're busy chewing on that one, what if the same operation were exponentially increased in scale to include most if not all of the world economy?
By their acts we shall know them.
Think about it and leave your comments. I'd be interested in learning how you feel - as would many others.
For more interesting articles and commentary please visit: http://www.haasfinancial.com
By David Haas
Consultant
In my consulting practice, I work with individuals, business owners, and professionals. I assist business owners and professionals in several critical areas ranging from business start-up, marketing, operational challenges, employee retention, and strategic planning to personal asset protection, financial, and retirement income planning. Often, these areas relate and need to be integrated to work most effectively. I also assist business owners in developing exit-strategies that enable them to maximize the value of their business interests and preserve their lifestyle in retirement. For individuals, I primarily focus on tax reduction, financial, and retirement income planning.
© 2009 David Haas, Consultant
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