• 21 Aug 2013 at 3:07 PM

Pot Stock Pitches Might Be Illegal In Two Ways

FYI:

The Financial Industry Regulatory Authority, or Finra, issued an investor alert Tuesday cautioning investors that some marijuana stock pitches bear the hallmarks of classic Wall Street “pump and dump” schemes.The investment pitches can come via email, Twitter, webinars or fax, the alert said. In such scams, promoters of thinly traded, low-price shares (or penny stocks) fuel investor demand by hyping the stocks’ growth potential. Then they dump the stock, saddling investors with worthless shares. One marijuana-focused company, unnamed in Finra’s alert, issued 30 news releases in the first half of this year. Promos exclaimed the stock “could double its price SOON” and was “poised to light up the charts,” even though the company reported only losses and noted it had yet to formulate a business plan.

Also:

The regulator stopped short of publicly identifying any particular frauds. But Finra has seen an uptick in spam email and Internet promotions of marijuana-focused penny stocks with questionable financial pictures, said Gerri Walsh, Finra’s senior vice president for investor education. “Whenever there’s a next big thing, we see fraudsters swimming like sharks trying to get in on the action,” Walsh said. “And that appears to be what’s happening here.”

Wall Street regulator warns of marijuana stock scams [L.A. Times]
Medical Marijuana Spawning Pump-and-Dump Scams, Finra Says [Bloomberg]

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Comments (7)

  1. Posted by Guest | August 21, 2013 at 3:14 PM

    Solid contribution Shazar…

  2. Posted by Gov of Alaska | August 21, 2013 at 3:16 PM

    Exactly 9 none-white space characters. Come on Shazar you can do better.

  3. Posted by His Munificence | August 21, 2013 at 3:23 PM

    With Shazar, less is mroe

  4. Posted by Zach Kouwe | August 21, 2013 at 3:36 PM

    Waiting for " Here's What Made Jon Shazar Crack At Dealbreaker "
    http://www.businessinsider.com/heres-why-zach-kou

    – Zach

  5. Posted by OpportunityCost | August 21, 2013 at 4:37 PM

    He obviously saw how Matt wrote an absolute NOVEL to simply tell us how Goldman's options desk fucked up yesterday and decided to go the exact opposite direction.

    Disclaimer: No i did not read Matt's story.

    Disclaimer Disclaimer: Yes, its because it was too long.

  6. Posted by howisthishardtosee | August 21, 2013 at 5:38 PM

    Yes, it's almost like the two writers intentionally compliment each other

  7. Posted by BM Spy | September 10, 2013 at 10:22 AM

    Yea, something like:

    Shazar: Matt, you look great today

    Levine: Jon, where are your pants?