www.investing-performance.com   www.reverse-merger.infoAnatomy of a Real Pump and Dump
www.investing-performance.com    www.reverse-merger.info              Disclaimer: This is not investment advice of any    ...
www.investing-performance.com  www.reverse-merger.info       This data is from   an actual SEC complaint    alleging a $33...
www.investing-performance.com  www.reverse-merger.info   Micro-cap companies are     easier to manipulate      because the...
www.investing-performance.com  www.reverse-merger.info The defendants merged Chinese  companies into US public shell  comp...
www.investing-performance.com  www.reverse-merger.infoLarge blocks of unrestricted shares  were issued at little or no cos...
www.investing-performance.com  www.reverse-merger.info  This enabled the defendants   to control the entire float     of t...
www.investing-performance.com  www.reverse-merger.info At first, there was little or no trading volume in the stock,      ...
www.investing-performance.com    www.reverse-merger.info  The defendants, corporate insiders,  or others at their directio...
www.investing-performance.com  www.reverse-merger.infoNext, the defendants coordinated   the launch of spam e-mail    camp...
www.investing-performance.com  www.reverse-merger.infoThese spam attacks corresponded  with press release campaigns purpor...
www.investing-performance.com    www.reverse-merger.info The spam e-mails contained false and  misleading information and ...
www.investing-performance.com    www.reverse-merger.info These spam e-mails were intended to   pump or increase the prices...
www.investing-performance.com  www.reverse-merger.info  Along with, or shortly after,  the spam e-mail campaigns,the defen...
www.investing-performance.com    www.reverse-merger.infoUnder instructions from the defendants,    the corporate insiders,...
www.investing-performance.com    www.reverse-merger.info   The proceeds were used to pay the      defendants and the spamm...
www.investing-performance.com  www.reverse-merger.info       We now look at     one of these stocks.
www.investing-performance.com  www.reverse-merger.info  To start, the company issued   30,000,000 shares of Stock       to...
www.investing-performance.com  www.reverse-merger.info       This increased the outstanding common stock to          31,16...
www.investing-performance.com  www.reverse-merger.info  Using an invalid SEC filing     for 6,000,000 shares,  the defenda...
www.investing-performance.com  www.reverse-merger.info    The stock was re-listed            on the     Over- the-Counter ...
www.investing-performance.com  www.reverse-merger.info  The company filed a 10-Q        with the SEC     showing $53 in ca...
www.investing-performance.com  www.reverse-merger.info   A spam e-mail campaign        was coordinated with a press releas...
www.investing-performance.com   www.reverse-merger.infoThe spam emails falsely said that thecompany was to acquire a $75 m...
www.investing-performance.com   www.reverse-merger.infoThe spam e-mail often predicted the     news in the press releases ...
www.investing-performance.com    www.reverse-merger.infoFor 90 days before the spam, the stock    traded sporadically at p...
www.investing-performance.com    www.reverse-merger.info           In the two weeks    leading up to the spam e-mail, the ...
www.investing-performance.com     www.reverse-merger.infoHere isthe chart
www.investing-performance.com  www.reverse-merger.info           There were   three stages in the trading.
www.investing-performance.com     www.reverse-merger.infoFirst, up until the spam campaign starts, the defendants created ...
www.investing-performance.com     www.reverse-merger.info     As the spam campaign starts,     the stock spikes to 69 cent...
www.investing-performance.com     www.reverse-merger.infoHere isthe chart
www.investing-performance.com  www.reverse-merger.info Assuming that most of the sellvolume was from the defendants, their...
www.investing-performance.com  www.reverse-merger.info      After the spam ends,      the stock still trades  at about ten...
www.investing-performance.com  www.reverse-merger.info        By the next year,the price is down to three cents    and the...
www.investing-performance.com  www.reverse-merger.info    This follows the pattern    I describe in my books:         accu...
www.investing-performance.com   www.reverse-merger.info The stock was accumulated by the  insiders at low prices when they...
www.investing-performance.com  www.reverse-merger.info   What caused the great spike and the great public enthusiasm      ...
www.investing-performance.com    www.reverse-merger.info       Some of these buyers           are day traderswho do not ca...
www.investing-performance.com   www.reverse-merger.infoThe stock rose to a market value ofsome $15 million or more at its ...
www.investing-performance.com  www.reverse-merger.infoAnyone paying up for the stock  was gambling on the future.  In most...
www.investing-performance.com  www.reverse-merger.info   Buy stocks that are selling     below their true value,    as I d...
www.investing-performance.com     www.reverse-merger.infoFor more on stock trading, go to my website,www.investing- perfor...
www.investing-performance.com  www.reverse-merger.info               Buy my book                “How to Find              ...
www.investing-performance.com    www.reverse-merger.infoSubscribe here on YouTube for more free videos and let me know wha...
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Anatomy of a real pump and dump

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Shows how a stock market manipulation worked. http://www.investing-performance.com http://www.reverse-merger.info

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Anatomy of a real pump and dump

  1. 1. www.investing-performance.com www.reverse-merger.infoAnatomy of a Real Pump and Dump
  2. 2. www.investing-performance.com www.reverse-merger.info Disclaimer: This is not investment advice of any kind. You are on your own.These types of stocks are VERY risky.You could easily lose all your money.
  3. 3. www.investing-performance.com www.reverse-merger.info This data is from an actual SEC complaint alleging a $33 million manipulation of eight small US companies.
  4. 4. www.investing-performance.com www.reverse-merger.info Micro-cap companies are easier to manipulate because they have smaller public float.
  5. 5. www.investing-performance.com www.reverse-merger.info The defendants merged Chinese companies into US public shell companies in reverse mergers.The companies changed name and conducted a reverse split
  6. 6. www.investing-performance.com www.reverse-merger.infoLarge blocks of unrestricted shares were issued at little or no cost to nominees, whose names were being used to disguise the defendants’ ownership.
  7. 7. www.investing-performance.com www.reverse-merger.info This enabled the defendants to control the entire float of the issuer’s stock.
  8. 8. www.investing-performance.com www.reverse-merger.info At first, there was little or no trading volume in the stock, which often traded at prices below $1.
  9. 9. www.investing-performance.com www.reverse-merger.info The defendants, corporate insiders, or others at their direction, opened brokerage accounts in the names of straw parties or nominees anddeposited the public companies’ stock.
  10. 10. www.investing-performance.com www.reverse-merger.infoNext, the defendants coordinated the launch of spam e-mail campaigns touting these low-priced stocks.
  11. 11. www.investing-performance.com www.reverse-merger.infoThese spam attacks corresponded with press release campaigns purporting to announce positive,newsworthy events that hyped the public companies’ business.
  12. 12. www.investing-performance.com www.reverse-merger.info The spam e-mails contained false and misleading information and baseless price projections.Some of the e-mails contained false and misleading language concerning purported acquisitions.
  13. 13. www.investing-performance.com www.reverse-merger.info These spam e-mails were intended to pump or increase the prices of the securities and/or create demand for the securities.These campaigns often created a short- term spike in volume and price.
  14. 14. www.investing-performance.com www.reverse-merger.info Along with, or shortly after, the spam e-mail campaigns,the defendants sold all the stock in these public companies.
  15. 15. www.investing-performance.com www.reverse-merger.infoUnder instructions from the defendants, the corporate insiders, or others working on their behalf, one of the defendants immediately wired out the entire proceeds of those sales to foreign bank accounts in the name of those nominees.
  16. 16. www.investing-performance.com www.reverse-merger.info The proceeds were used to pay the defendants and the spammers.In some instances, part of the proceeds was also sent back to the issuer or corporate insiders, who had concealed their beneficial ownership and trading in their respective issuer’s securities.
  17. 17. www.investing-performance.com www.reverse-merger.info We now look at one of these stocks.
  18. 18. www.investing-performance.com www.reverse-merger.info To start, the company issued 30,000,000 shares of Stock to a consultant for“business restructuring services.”
  19. 19. www.investing-performance.com www.reverse-merger.info This increased the outstanding common stock to 31,162,902, and the 30 million shares were 96% of the outstanding common stock.
  20. 20. www.investing-performance.com www.reverse-merger.info Using an invalid SEC filing for 6,000,000 shares, the defendants were to sell 5,780,000 shares in the pump and dump.
  21. 21. www.investing-performance.com www.reverse-merger.info The stock was re-listed on the Over- the-Counter Bulletin Board.
  22. 22. www.investing-performance.com www.reverse-merger.info The company filed a 10-Q with the SEC showing $53 in cash and a negative net worth of $10,000.
  23. 23. www.investing-performance.com www.reverse-merger.info A spam e-mail campaign was coordinated with a press release campaign.
  24. 24. www.investing-performance.com www.reverse-merger.infoThe spam emails falsely said that thecompany was to acquire a $75 millionproject, that it was in partnership with a multimillion dollar developer, a potential agreement with a brakemanufacturer, and had the prospect of build an auto exhibition center.
  25. 25. www.investing-performance.com www.reverse-merger.infoThe spam e-mail often predicted the news in the press releases (“get on XXX before the news hits. . .”).The company coordinated 13 press releases with the spam e-mail.
  26. 26. www.investing-performance.com www.reverse-merger.infoFor 90 days before the spam, the stock traded sporadically at prices from $0.00013 to $0.22, volume ranging from zero to 47,166 shares.Most of the trading volume was by the defendants to create the appearance of trading activity in the stock.
  27. 27. www.investing-performance.com www.reverse-merger.info In the two weeks leading up to the spam e-mail, the stock only traded 12,200 shareson two trading days at $0.11 to $0.12.
  28. 28. www.investing-performance.com www.reverse-merger.infoHere isthe chart
  29. 29. www.investing-performance.com www.reverse-merger.info There were three stages in the trading.
  30. 30. www.investing-performance.com www.reverse-merger.infoFirst, up until the spam campaign starts, the defendants created some trading in the market that pushed the stock from virtually nothing to twenty cents on light volume. The stock trades as high as 30 cents, volume 13,524.
  31. 31. www.investing-performance.com www.reverse-merger.info As the spam campaign starts, the stock spikes to 69 cents, volume is 2,099,473.As the spam continues, volume is over 5,000,000 shares and the price closes at $0.20.
  32. 32. www.investing-performance.com www.reverse-merger.infoHere isthe chart
  33. 33. www.investing-performance.com www.reverse-merger.info Assuming that most of the sellvolume was from the defendants, their take during this week was probably over $1 million.
  34. 34. www.investing-performance.com www.reverse-merger.info After the spam ends, the stock still trades at about ten cents per share,hundreds of thousands of shares per day.
  35. 35. www.investing-performance.com www.reverse-merger.info By the next year,the price is down to three cents and the volume is only tens of thousands of shares per day.
  36. 36. www.investing-performance.com www.reverse-merger.info This follows the pattern I describe in my books: accumulation, markup and distribution.
  37. 37. www.investing-performance.com www.reverse-merger.info The stock was accumulated by the insiders at low prices when they watered the stock and in their early purchases in the market.When the spam started the stock was marked up and then distributed.
  38. 38. www.investing-performance.com www.reverse-merger.info What caused the great spike and the great public enthusiasm for this stock?Seeing the great “news” speculators buy hoping that there is a “greater fool” to take them out at higher prices.
  39. 39. www.investing-performance.com www.reverse-merger.info Some of these buyers are day traderswho do not care how high the stock is; they only care that the stock goes higher.
  40. 40. www.investing-performance.com www.reverse-merger.infoThe stock rose to a market value ofsome $15 million or more at its peakwhen in actual fact the company onlyhad a minimal or negative net worth, minimal or no revenues, and little or no cash.
  41. 41. www.investing-performance.com www.reverse-merger.infoAnyone paying up for the stock was gambling on the future. In most of the these stocks, this future rarely materializes.
  42. 42. www.investing-performance.com www.reverse-merger.info Buy stocks that are selling below their true value, as I describe in my book“How to Find a Home Run Stock.”
  43. 43. www.investing-performance.com www.reverse-merger.infoFor more on stock trading, go to my website,www.investing- performance.comand
  44. 44. www.investing-performance.com www.reverse-merger.info Buy my book “How to Find Home Run Stock” on Amazon.com
  45. 45. www.investing-performance.com www.reverse-merger.infoSubscribe here on YouTube for more free videos and let me know what else you would like to see.

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