By Ann C. Logue
Although it may seem like all the pump and dump schemes moved on to crypto, there are still some old-school penny stock hustlers working the boiler rooms. The SEC charged a five-person, multi-national team with running a $58 million penny stock scam targeting US investors from a call center in Colombia.
Almost as diverse as the Marvel cinematic universe, the defendants allegedly created a series of corporate names and spoofed phone numbers, enticed people to open accounts, and then pressured them to buy shares in penny stocks. It was a more-or-less textbook pump-and-dump scheme involving 18 stocks. The SEC also alleges that the defendants received another $10 million for promoting certain stocks.
The pump-and-dump happens at all levels and in different forms. I recently heard about an offshore money manager looking to hire a ghostwriter for a book about crypto. He wanted the book to highlight a few particular coins, which he probably owned in large amounts. A $50,000 book budget would be a drop in the bucket if it led to a big profit. There’s also the usual assortment of YouTube videos, Reddit posts, and celebrity influencer campaigns to create awareness—and price increases—in favored names.
One of the defendants, Francis Biller, was involved in one of British Columbia’s biggest financial frauds. Vancouver, of course, is the home of countless penny stock schemes, so it shouldn’t be a surprise to find a Canadian involved.
Most of the Marvel movies are filmed in Vancouver. Maybe it’s time for a new Quebecois or Inuit character who can stop financial fraud in its tracks. Until then, and in the real world, we can expect to see plenty more pumpers and dumpers out there.
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