Blog : $95 Million Penny Stock Fraud Conviction!

by Peter Leeds on November 19th, 2015

 
 
More justice has just been dispensed in a $95 million penny stock fraud, which was the largest pump & dump crime ever committed.  The 8th and 9th defendants were slapped with guilty verdicts, to join the earlier 7 thieves.
 
The jail terms handed down will span decades, and considering that one of these recent defendants is 75, he will not be seeing a sunset again ever.  Don't feel bad for him though - lost in all of the deceit and lies, dollar amounts and prison sentences, were the lives destroyed among well-intentioned (albeit somewhat naive) penny stock investors.
 
While it may be easy to blame the victims for being too ambitious, greedy, or dumb, I'd encourage you to think again.  This penny stock fraud ran the gambit of tactics, including:
 
  • bribing stock brokers to recommend the penny stocks in question to their clients
  • releasing blatant lies via press releases
  • professional-looking research reports
  • bold + compelling statements which seemed believable (but were total fabrications)
 
Now, when your full-service stock broker gives you a "heads up" on the latest penny stock that is set to explode in price, you may be somewhat inclined to trust him.  You can't be blamed for not realizing that your "advisor" is so corrupt that they are throwing you under the bus to make an extra few bucks.
 
 
Add to that the rapid early gains which these promoted penny stocks showed investors.  If you follow the advice of your broker and the investment climbs, you become much more inclined to toss more money into the scheme.
 
Of course, any active, experienced investor would have known better than to invest in these penny stock companies.  They would have:
 
  • looked into the obviously dubious and questionable claims
  • spotted the cheap promotional tactics
  • maybe even taken a peek at the financial position of the underlying businesses
 
Sounds great, but for the vast majority of the victims, and why they became victims, was because investing was not at the center of their world.  Dentists, lawyers, elderly people, overly ambitious less-experienced investors...  
 
The list goes on and on, but what they had in common was limited time to devote to making the wise investment choices.  I suspect that more conversations between victims and dishonest stock brokers ended with, "OK, sounds good," as opposed to, "Wait a minute, I have a few questions."
 
There will be increasingly complex scams in penny stocks in the future, and some of the promotional efforts may even cross your path.  The good news for you and everyone is that avoiding these schemes is simple:
 
  • always conduct proper due diligence in penny stocks
  • wait before you buy (never trade within the first week when you initially hear about an investment)
  • call the company
 
Much like the key to weight loss is NOT some simple machine, or the secret to health is NOT some pill, the secret to rapid wealth is not some "exploding" penny stock.  Instead, weight loss is about dietary regime, health is also about dietary regime, and rapid wealth from penny stocks is about involved analysis work.
 
Your best chance of profiting from low-priced, high-quality penny stocks, is to get the benefit of the authority on penny stocks.  Peter Leeds, along with his full team, does all the analysis involved to uncover the truly best level of shares, which are trading at greatly undervalued prices.
 

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