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Posts Tagged ‘pump and dump’

Operation Broken Trust Missed “The Big One”

Posted by Larry Doyle on December 8th, 2010 7:55 AM |

$8 billion is a lot of money, right? Right.

But when is $8 billion NOT a lot of money?

$8 billion is NOT a lot of money when it is compared to $35 billion, $135 billion, or $335 billion. Agreed?

Agreed. Thank you. Let’s continue.

Sense on Cents is a huge proponent of exposing and prosecuting financial fraud wherever it occurs. To this end, I was happy to see that the Feds have had their ‘street cleaners’ operating overtime the last few months. The results of the Fed’s ‘street cleaning’, also known as Operation Broken Trust, is a not insignificant collection of 231 cases totaling $8 billion in losses. Well done. In all sincerity, I commend each and every individual involved in this effort. While those arrested deserve due process, they also deserve to be prosecuted to the fullest extent of the law. If guilty, I hope they receive maximum sentences.

Regrettably, though, the street cleaners missed “The Big One.” Which scam is that? A scam which by any measure could reasonably be described by any of those much larger figures referenced above.    (more…)

What Are Insiders Doing, or Pump and Dump?

Posted by Larry Doyle on June 1st, 2010 12:03 PM |

Who truly knows more about a company’s prospects than the executives running the operation? These executives, commonly referred to as insiders, are privy to sensitive, non-public information. Insiders are subject to severe restrictions in how they handle this information, and most importantly in how they manage their own finances.

Insiders selling company stock is not always an indication that the company is having problems. Insiders manage their own finances and will sell for a variety of reasons, especially for tax purposes. That said, monitoring insider activity is always prudent. Are there trends? Is activity heavily skewed in one direction or another? Is there a major inconsistency between insider activity and analyst recommendations? (more…)

Pump and Dump

Posted by Larry Doyle on May 6th, 2010 2:28 PM |

Has the price action over the last year been largely nothing more than one of Wall Street’s greatest scams? Which scam is that? The classic scam in the securities industry known as pump and dump. While this scam is typically relegated to penny stocks or thinly traded stocks, the fact is the basic principles have been utilized within our current market structures as well.

The coordinated actions amongst global governments, regulators, and accounting boards have allowed the system to disguise the fact that our global economies remain mired in excessive debt. Obviously, certain countries and companies are much less impacted by debt than others but largely speaking the global debt vs GDP ratio remains exceptionally high. This fact is not changing anytime soon. (more…)

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