Skip to main content

You Can’t Con An Honest John

  • Author:
  • Updated:

One of the oldest tricks in the con-man’s bag is convicing the mark that he’s actually getting one over on the con-man. The classic example is the Fancy Umbrella.
You walk into a bar, have a drink and when you walk out you leave a fancy looking (although actually cheap, say $10) umbrella behind. Later, your friend walks in and spots the umbrella, and offers to buy it from the bartender for $500, claiming it’s a rare collectors item. The bartender isn’t a thief so, he doesn’t sell it right out. Instead, he asks your friend to come back the next day to buy it. When you walk back in later and ask for your lost umbrella, eight times out of ten the bartender offers to buy it from you for, say, a hundred bucks. His plan is to sell it to your friend, who is never returning. You just took him for $90 (the hundred less the ten dollar initial investment). And you don’t have to feel bad about it because, after all, he was trying to get over on you by buying an umbrella he knew was worth $500 for $100.
You can’t cheat an honest man but, fortunately for the conman, honest men are few and far between.
This is how the stock pumping trick the NASD is warning about today—it takes advantage of the willingness of investors to seek-undeserved gains. And apparently there are enough corruptible investors that conmen are making money off these things.

It's a new twist on a classic stock scam: enticing people to buy certain stocks with phony e-mails that look as if they were intended for someone else, securities regulators say.
The National Association of Securities Dealers, the brokerage industry's self-policing organization, issued an alert Monday regarding the so-called ''I hope this is your e-mail'' scam.
It is the latest variant of a ''pump and dump'' scheme, where perpetrators talk up small, thinly traded stocks to push up prices so they can sell their shares in those companies at a profit.
The e-mails, made to appear as though they were sent to the recipient in error, often are poorly worded, the NASD said.
An example: ''Hi I hope this is your e-mail. I was pleased to meet you the other day. I expect you was excited about New York. So much so much happening all the time, lot of great opportunities. And speaking of opportunities, the deal I was speaking about yesterday involves a company known as (company name) ...
''It's already heading up, but the big news isn't even out yet, so there's still time. I have got this shares already and made 2000. I propose you do the same. Hope this helps you out. I'll see you this weekend.''

Investors Warned of E - Mail Stock Scams [Associated Press in the New York Times]