This may come off as retarded, but I gotta ask. How do authorities know a pump and dump scheme is happening? Everything that happens in that scam is a completely reasonable follow-through.
Brokers push a stock, its their job. The stock inflates. Any person holding shares of a rich stock will then sell them off to make a quick profit. This is all reasonable. The only thing is these fraudsters aren't gambling with the stock market. They know they're gonna make money. But authorities wouldn't know that. How do they catch these guys?
>>1074943
>But authorities wouldn't know that. How do they catch these guys?
Giving illegal financial advice("pumping" a stock without disclosing your holding in it, not being legally allowed to convince people to buy it, etc) and some guy buying HUGE volume of an otherwise dead stock a week before selling it all for an inflated price is sure to alert people.
>Gee this random stock just shot up 3800% in price over seemingly nothing, ok let's look at the records and see who has bought it literally just before this
>>1074943
Doing too well raises some alarm bells and they pay people to investigate that shit.
How is pumping and dumping illegal? Are you not allowed to get people excited about a stock that you have a big investment in? Isn't that how Oprah just made $12mil?