ATTORNEY NEWSLETTER
Beware of Pump and Dump Schemes
Pump and dump schemes are all too common when it comes to penny stocks. If you trade penny stocks, be wary of sudden run ups in share prices. The run up may be a pump and dump scam: an artificial surge in share prices followed by a dump of shares driving prices back down. Shareholders who bought on the uptick are left holding the bag. The California securities fraud attorneys at Evans Law Firm, Inc. represent investors victimized by pump and dump schemes and other kinds of security fraud. If you’re in California and a victim of securities fraud call our securities fraud lawyers today at (415)441-8669.
Recently, the government busted one such pump and dump scam on a penny stock when the U.S. Attorney for the Southern District of California and the Securities Exchange Commission (SEC) announced criminal charges in an offshore broker’s pump and dump scheme. The scheme cost investors $1.57 million in losses.[1] In the case, four brokers and promoters ran up Kelvin Medical Inc. (KVMD) share prices by creating artificial trades among controlled groups. The interrelated trades created a misleading appearance of active trading. The share price went from zero to $1.20 per share in under two months. The scammers also touted the stock on an investor website they secretly owned. Duped investors bought as the stock price soared.
What the scammers did not know was that the SEC was monitoring trading activity in the stock through an undercover operation. The scammers were caught, the scheme shut down, and now the government is prosecuting the brokers and promoters involved. Investors might have avoided losses had they checked out the backgrounds of the fraudulent group. As a reminder, always check the background of any broker, stock promoter, or advisor – and the firm they represent – before transacting any business with them. The California securities fraud lawyers at Evans Law Firm encourage you to use the free and simple search tool found at http://Investor.gov. Be cautious of any broker or advisor or firm with a history of misconduct, including disciplinary actions by the Financial Industry Regulatory Authority (FINRA). By taking this simple step, you may protect yourself against potential fraud. And be skeptical of any quick run up in share prices on thinly traded penny stocks!
Contact Us
If you have been defrauded by a broker or advisor through securities fraud, call Ingrid M. Evans and the other San Francisco and California securities fraud attorneys at Evans Law Firm, Inc. at (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our attorneys have experience with securities and other investment fraud, financial elder abuse cases and complex qui tam or whistleblower cases including offshore tax avoidance cases, complex financial contract cases and cases against large insurance companies. We can help guide your case through a jury trial or toward an equitable settlement. We also handle cases involving physical elder abuse, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.
[1] Evans Law Firm, Inc. was not involved in the case in any way.
