A Conservative Media Penny Stock Scam

Secondly, the penny-stock scams were specifically cited as a looming problem for gullible investors: Most of the focus is on pump-and-dump schemes, which involve attempts to inflate a company’s share price and then sell, or dump, the stock before unsuspecting investors get wise to the scheme. These scams work best with penny stocks traded over the counter, where even a small change in price can yield big returns.

Earlier this year, the SEC temporarily halted trading for five of these stocks that had ties to the marijuana industry. Pump-and-dump scams may involve company executives or board members looking to unload their shares. In a different variation, a penny-stock company is targeted by outside traders who will publish false information about a company to juice the share price.

And one of the ways that false information proliferates is through sponsored emails sent to devotees of conservative media outlets. For example, as Hananoki reports , readers of RedState , Newsmax or Human Events may have been lucky enough to receive this advertisement from “Undervalued Quarterly,” which bills itself as the “#1 Financial Newsletter.”

The ad touts “MediJane Holdings” as an investment “that’s poised to ignite a frenzy of profits.” Readers are promised the possibility of a staggeringly high return on their investment and urged, “You must get in the game now!” Only those who stick around for the fine print discover that the whole purpose of this mailer is to “enhance public awareness for MediJane” on behalf of shareholders who “hold a large amount of shares … and intend to sell them,” which will go on to “affect the value of your shares (negatively).”

The truth of what this enterprise is actually all about is literally placed at the bottom, in teensy letters, and stuffed within parentheses. Per Media Matters, you won’t believe what happened next : Readers who took the financial advice would have made a bad call as the stocks have plummeted.

To read more, visit http://www.huffingtonpost.com/2014/12/03/conservative-media-grifting_n_6263478.html

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