Comments: Silver bullets, silver homers

Re: 'Pump and Dump' Scams

Looks like they've set up some spam-trap e-mail addresses, and are monitoring them for the occurrence of ticker symbols of thinly traded/OTC stocks. Correlating this with unusual trades ought to yield some fairly damning evidence of a pump 'n' dump going on.

It might be a good idea to warn people in a non-intrusive that there is a suspected pump 'n' dump in progress, but they'll have to be careful how they roll it out for an online brokerage. Traders who are used to having their orders go through with a maximum of reliability and a minimum of fuss might be very upset if they are suddenly locked out of their accounts for suspected fraud ( la PayPal). What if someone is temporarily in a risky position that he/she needs to cover right away?

In my opinion, if you are running an online brokerage, you should just have a reliable computer system that sells when the customer says sell, and buys when the customer says buy (as long there's money to cover it). If people want advice, like "Well, that might be kind of a risky trade because we've noticed some suspicious activity lately, and blah, blah, blah ... maybe this other stock would be better..." they need to pick up the phone and call their broker.

Posted by anon at August 14, 2008 06:39 AM

It looks to me as if somebody started with a real euro coin and modified the engraving. I've only seen a low-quality photo from one of the freebie daily papers, though. I've scanned it and I'm sending it to you under separate cover.

Posted by Ray at August 14, 2008 09:52 AM
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