We all received them in the mail. They come as bright, colorful, glossy and in-depth reports on a ground floor investment, still trading in cash for the next great technology. They have fancy names for them, such as “Wall Street Insider” or “The Underground Stock Report”. They often link the stock promoted by legitimate companies or the needs of common sense around the world. The problem is that, although it always sounds promising, you are easily comforted and delighted to participate in what is known as “pump and discharge”.
The anatomy of the scam involves these small companies, which usually trade on the Over the Counter Bulletin (OTCBB). They are also known as “Pink Sheets”. OTCBB is not part of the NASDAQ Exchange and usually involves extremely small companies with questionable stability. They usually pay a large amount of money to an “action promoter” and are often themselves part of the scam. Large blocks of stock accumulate and the sender goes out. The trap is now set as involuntary investors begin to see the stock moving from below and trying to catch the wave. As investors pile up and share prices rise, owners and stocks promote sell everything, “The Dump” and leave it in your hands.
They will often lead you to billboards on the internet with carefully controlled messages, while you wait patiently for the next great “thing” to grow from the ashes of a few pennies or micro pennies to 50 cents, a dollar, maybe the next Google ! Hey, even if it got to 0.04 cents, I’d double my money, wouldn’t I? Unfortunately, after the promoters and those inside the company leave the building, although these companies will continue to trade for a while, they rarely stay too long. Do you need more evidence of a possible fraud? Read the fine print. The words we want to believe do not exist because of all the wonderful pretensions and nice graphics that fascinated us with the potential riches of the world. The lowercase letters will actually tell you how much the promoter is paid, regardless of whether they own shares and emphasizing in many ways that this is actually a very high risk speculative investment. The reality is in my opinion, it is not an investment at all; it is a major scam that should be stopped.
So, this week, when the next stylish-looking mailer comes to your house and you think, hey, it’s only $ 5,000, let’s shoot! Throw !!! Potentially good and extraordinary companies do not start on OTCBB as pink sheets. The stock market has its own inherent risks even if you treat it like a casino; it is very likely that you will have the same result as when you go to a casino.