Since 1999 our law firm has recovered more than $350,000,000 for victims of investment fraud and misconduct.
Jury Verdict Won Against Prudential Securities $262 Million
Recovered for 100-Year Old Widow $30 Million
Recovered in Retirement Losses $10 Million
Recovered for a Large Group of Individual Investors $6.5 Million
Recovered for Elderly Victim in Ponzi Scheme Case $3.8 Million
Recovered for Elderly Ponzi Scheme Victim $3.2 Million
Recovered for More Than 50 Families of Ponzi Scheme in California $3.2 Million
Recovered for 35 Families in Northeast Ohio $3.1 Million
Losses Recovered for 20 Retirees $3 Million
Recovered for Retired Physician Against Major Wall Street Firm Prior to Filing FINRA Arbitration $2.5 Million
How Do Pump & Dump Scams Work?
The “pump and dump” investment scam can be tricky for investors looking to get in on a good opportunity. The financial fraudsters who are responsible for this kind of investment fraud know exactly how to manipulate innocent investors and make an investment seem like a great deal going fast. Sometimes even the company responsible for the stocks used in the scam is completely unaware that fraud is going on until it’s too late—and ends up suffering for it. We believe understanding how financial fraud works is a big step in learning how to avoid it.
“Pump & Dump” Scams Usually Work Like This:
- The fraudsters buy up stock, usually choosing a cheap “penny stock.”
- The fraudsters start spreading the word about the “promising” stock, aiming to “pump” up the stock and get people excited about potential gains on a supposedly limited-time offer.
- Investors start pouring money into the investment and the price starts to rise.
- The fraudsters start the next round of “pumping” the stock—sometimes even with made-up press releases or expert statements—and point to the rising price as evidence of its performance, which falsely inflates the price even more.
- The fraudsters keep it up until eventually “dumping” their shares for a huge profit and leaving investors scrambling to get rid of worthless stock as the price plummets.
Avoiding Pump & Dump Scams
In order to avoid a “pump and dump” investment scam, you should always:
- Be hesitant to listen to recommendations from strangers, especially those that promise an impending announcement from a company or a new product.
- Be suspicious of “limited-time offers” or promises of huge profits.
- Don’t give in to high-pressure sales tactics or increasingly aggressive marketing.
- Be sure that the stock trades on a national exchange.
- Be wary of any investment tips or offers that you receive online.
- Do your research before you invest to ensure everything looks as promised.
Get in Touch with Meyer Wilson Today
This type of investment fraud is very effective because it really seems like you're getting results. Investors can watch the stock prices rise, and may spread the word about their excellent investment choice. The companies are often completely legitimate, so even investors who research the investment may not realize what is happening until it is too late. The prices start to fall so quickly once the fraudsters pull out, that honest investors just don't have time to react.
If you have been taken advantage of through stockbroker misconduct, stock scams, or a "pump and dump" scheme, talk to one of the respected securities fraud attorneys with Meyer Wilson. We have over 50 years of collective experience helping victims of stock scams recover their losses through FINRA arbitration, mediation, and litigation. Give us a call for a FREE consultation.
Learn more about pump and dump schemes below:
More than $350,000,000 Recovered
Voted Best Lawyers in America® for over Ten Years Running
David Meyer is the Immediate Past-President of Public Investors Advocate Bar Association (PIABA)
Over a Thousand Investor Claim Cases Since 1999
Exclusive Focus on Investor Claims & Class/Mass Action Lawsuits
Deep Bench of Skilled Attorneys and Staff Members
Meyer Wilson has represented over 1,000 individual investors in high-stakes claims across the country, and has recovered over $350 million on their behalves. See what former clients have to say about our team.