An illegal way to make money through artificial manipulation of a stock's price (by essentially creating and controlling a self-fulfilling prophecy). Pump-and-dump scammers pick a penny stock, one whose price is low but the company is stable (ie, not going to tank anytime soon) and slowly buy up lots of shares of the stock; this can be done either by a third party who picks on an innocent company, or by owners of the company itself. Once they've got a large number of shares, they hype the stock, usually through high-pressure telemarketing or stock-related websites. As people get suckered into the hype, the stock price rises; the scammers "pump" up the value. Once the stock is sufficiently high (usually a few days or weeks later), they "dump" the stock; the hapless investors are left holding the bag when the stock crashes back to its real value.

If executed right and with gullible investors, a pump-and-dump is difficult to tell from normal market fluctuations; after all, hype is what drives the markets in the first place. However, once the SEC knows where to look for a pump-and-dump, it's easy to spot because of the terribly unbalanced share ownership and the otherwise illogical spike in a stock's price.

Here's a scam that targets day-traders and people looking for good stock tips. I received the following spam pump-and-dump (p+d) email today:

**BIG NEWS COMMING OUT FROM THIS COMPANY, FOR SURE TO BE A GROUND SHAKER.**

So Who Is EXMT? Exchange Mobile Tele Co
PK Sym: EXMT
Closed At Last: AUG 06 $0.21
Date OF Action? - May 27, 2008

Over the last 6 years, Exchange Mobile has been intensely involved in the wireless messaging and internet communications market. It has developed and implemented independent platforms to provide internet users and mobile subscribers an instantaneous form of communication.

Founded in 2000, EXCHANGE MOBILE Telecommunications Corp. is an innovator in developing customized applications leveraging leading-edge wireless technology, capturing the imagination of the wireless market while fueling consumer demand.

In the early part of 2002, EXCHANGE MOBILE developed wireless applications that offered SMS (Short Messaging Services) based value-added services to mobile users. EXCHANGE MOBILE has spent the early stages of its corporate existence building and developing a powerful and dynamic platform based on current SMS, WAP, and other emerging wireless protocols.

EXMT A HIGH PERFORMANCE STOCK? WE THINK SO AND PLAN TO SEE HUGE THINGS AUGUST 07 (Tuesday) 2007. ^EXMT^

Here's how a pump-and-dump works:

A scammer looks for penny stocks to invest in. In this case, it's a company called EXMT. They invest a lot of their money in a stock trade, usually picking up thousands of shares for (literally) pennies.

They blast out an email to their potential targets. A p+d email will extol how wonderful the stock is, and how a smart investor can make a fortune. If they send this spam out to fifty million email accounts with a .01 percent sucker rate, that's 5,000 people who fall for it. It's all in the numbers -- the more investors, the better the scammers will do. This is the pump portion of the scam.

When the marks start investing, they'll actually see the stock creeping up a few cents, which makes them happy. It appears the stock tip was correct. After 48 hours have passed, the scammers pull their massive investment out and cash in. If they had ten million shares that went up by a mere three cents, they made $300,000US. This is the dump portion of the scam.

After the huge investment is cashed in, the stock tanks, sending the share price down to erase any gains, or even making the price per share lower than when the mark invested.

This scam hits the occasional traders hardest, since they typically don't have the research skills to see if it's a good investment. As per all Internet scams, there's no such thing as a free lunch. Nobody would send hot stock tips to a complete stranger. They'd have their friends and relatives invest to make a fortune. Besides, if these folks were professionals, the email wouldn't have so many grammatical errors.

Don't fall for the p+d scam. If you're an investor, invest wisely.

Pump and dump is a term that refers to a technique used during lactation.

What is it?
Pump and dump refers to using a breast pump to express breast milk and then disposing of the milk usually by dumping it down the drain.

Why would you want to go and do a thing like that?
Frequently, this is done when the nursing mother is on medication that the baby shouldn't have or if she is away from the baby for an extended period of time yet wants to maintain her milk supply.

There is quite a bit of disagreement, most likely due to unknowledgeable doctors, over when a woman really needs to pump and dump due to medication. Some doctors will indicate that almost any time a woman is on medication, she should pump and dump, while others will indicate that the only time a woman should pump and dump is if the medication has been proven to be hazardous to infants, such as chemotherapy drugs.

Frequently, after pumping exclusively for a significant amount of time, women will start to notice a decrease in their milk supply. Pumping and dumping certainly has its purpose, but it's almost always better to nurse an infant directly if possible.

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