Legal Thriller Author Explains What Every Investor Should Know About Internet Stock Scams

A century ago P.T. Barnum sagely told us, "A sucker isstoked by the bargain-basement price, investors flew
born every minute." At the time he was, no doubt,to the stock driving its price from $5 to $7.50 in
correct.minutes. With the aid of the many day traders on the
No longer. In today's internet world, that time-span hasexchange, who buy quickly on rumor, the scam artist
been cut back to every nana second. Now that spamwalked off with a fast-buck haul of $520,000. Presto.
has been somewhat curtailed, scam artists haveNothing more than a classic pump and dump, only
moved their operations, largely, to internet bulletintaken out of the usual "pump" time frame, speeded up
boards and chat rooms. That's all. A change of venue.so that the whole thing would come to climax before
Like maggots fried in hot grease, they have moved,law enforcement authorizes could even answer their
jumped, spread out, occupied many of these newphones to take the inevitable complaints. Real. But, like
communications centers.a classic page from a legal thriller book.
This up-the-ante, beat-the-street move was madeTake a long look sometime. Observe all of the stock
necessary because state law enforcement agencies,boards and news boards hanging in cyberspace. As
the SEC, and the FTC have, in recent years, set upso many scam artists still dance on the internet in a
teams to daily police the worldwide web. With spam,perpetual spam-fest, this stock "guru" found a better
being the most obvious and easiest to detect, theway. Whereas legendary con man, the Music Man's
scam artists have been forced to a better, alternativeProfessor Harold Hill, gave us 76 trombones, he put a
outlet for their "avant-garde" visions.little cha-cha-cha into the sax section.
With a chat room, nothing more than pulling all the oldThe SEC gets in upwards of 200 complaints a day
con-lines out of mothballs and reusing them is needed.about illegal activity on the web. Most pf these are
With con-world tactics, they spiel out typical con-likestock scams. With fraud made this easy it should
jargon, and reel in the usual high percentage ofcome as a heavy-booted reminder that this particular
suckers. Just like the good old days.form of Scamology 101 should be featured in Scam
With bulletin boards--those Illusory walls seeminglySchool, for the benefit of all concerned watchdogs and
profaned by graffiti--it's a little different. The scamlaw enforcers.
artists are challenged. Tactics and timing take greaterIt's textbook.
emphasis. Try this example on for size:With his imposing presence, elegant sartorial style, and
A clever scam artist left a message on a prominenteloquent use of the language, the con man has
stock board that a small U.S. hi-tech company wasevolved. And now, with his range so widely expanded,
about to be bought up by a European firm foryour life as a potential target has expanded right along
$900.000.000. This was a sum nearly double its marketwith it. Unless you count your age in elephant years,
value. The posting had a link to another bulletin boardyou will most likely find yourself in his cross-hairs at
which displayed a press release giving the details. Thesome moment in your life.
press release was a phony, placed there by the conPrepare. Learn. Now is the time. Be ready for that
man himself. His purpose was 1-track, to temporarilycure-all elixir when it comes.
drive up the price of the stock. With the temptations