Do Pump and Dump Scams Work?posted by MR WAVETHEORY at 8/28/2006 07:28:00 PM
Pump and Dump Scams Work
Eric Savitz at Barron's reports that "a study that found people who respond to e-mailed “pump and dump” scams can lose 8% of their investment in two days, but that “spammers who buy low-priced stock before sending the e-mails, typically see a return of between 4.9% and 6% when they sell." It proves the law of conservation: 8% loss for buyers, 6% gain for scammers - what about the other 2%? It probably goes to the stock brokers - commission!