Peter Leeds the Penny Stock Pro, Warns Investors Against the Danger of “Pump and Dump” Stock Practice

The Peter Leeds the Penny Stock Pro, Warns Investors Against the Danger of “Pump and Dump” Stock Practice

Peter Leeds known for his ethical business practice offers tips on how-to-recognize the” real deal” from “Pump and Dump” online scammers.
By Peter Leeds, CEO of Peter Leeds Inc.

NEW YORK,(RUSHPRNEWS) August 8, 2008 – According to wikipedia, “Dump and Pump” “is a form of microcap fraud that involves artificially inflating the price of a stock through false and misleading positive statements, in order to sell the cheaply purchased at a higher price.

Once the scam artists “dump” their grossly overvalued shares, the price falls and investors lose their money”. ( http://en.wikipedia.org/wiki/Pump_and_dump).

I would like to provide you some tips on how to protect yourself against this unethical practice.
1. Don’t invest in stocks you hear about in message boards, e-mail spam, unsolicited faxes, or free online websites.
OK, so there’s only one tip.

Wikipedia reports that 15% of the e-mail spam messages you get are ‘pump and dump’ stock scams. A survey of 75,000 unsolicited emails sent between January 2004 and July 2005 concluded that spammers could make a return of 6% by using this method, while recipients who act on the spam message typically lose 5% of their investment within two days.

Thankfully, this dishonest practice has been dramatically curtailed in recent years, thanks to S.E.C. crackdowns, increased investor awareness, and spam-blocking technology.
Regulatory bodies have actually come up with some pretty inventive ways to further combat this issue – for example, the subject company of an e-mail spam may face a cease-trade order from the stock exchange for five days. This is not to punish the underlying company, but rather to prevent the pump and dump from working for the crooks.

You may ask why there hasn’t been more success catching the culprits, putting them in jail, and stopping the practice altogether. Well, in North America there has been excellent progress, and pump and dump originating from the U.S.A. is now almost zero.
The problem arises when the pump and dumpers are located overseas, where it is much harder to locate the source, and often impossible to do anything about it once you find them.

I have faith that this will change in the coming years. Until then, you may have to delete a lot of junk mail.

While focused by necessity on lower priced stocks, pump and dump is not a ‘penny stock problem’ in my opinion. It is simply another form of crime. Many cities have high crime areas, but does that mean the cities in question are high crime?

Similarly, pump and dump practices are dishonest and risky for investors, but that does not mean penny stock investing is dishonest and risky.

In fact, good penny stock investors are completely immune to pump and dump, because they would never be duped by such an obvious scam.

Even more so, subscribers to www.PeterLeeds.com benefit by only getting involved with fundamentally strong, well-run companies with tremendous upside, which are simply trading for pennies because they are overlooked or undiscovered.

Investors who want to start benefiting from penny stocks can learn all about how to trade these shares, and protect themselves from the easily avoidable pitfalls, by visiting my free, online book at www.PennyStocks.org.

As the Penny Stock Professional, I make it my top priority to bring ethics and honesty back into a wonderful market niche that has gotten a bad name from a few bad apples.
One of the ways I do this is with my 100% Unbiased Guarantee. We do not take any payments, bribes, or favors from the companies we profile. My employees and I do not trade in the stocks we feature. We have no hidden motivations in any way, shape, or form.

Many penny stocks are America’s next great companies, that are just getting started, or are undiscovered. Buying shares in such companies early on can be very lucrative. You just need to know which ones to invest in, and that is what we do through the penny stock service at www.PeterLeeds.com.

About Peter Leeds:

Peter Leeds, CEO of peterleeds.com is also a successful book author. Leeds is widely known in the industry as the Penny Stocks Pro, a reputation built on giving clear and informed financial guidance based on years of investing in penny stocks, a passion that started at the young age of fourteen when he invested and lost the hard-earned sum of $3,800. From this modest beginning to today’s own financial success, Leeds learned by mistake and developed LEEDS ANALYSIS, a proprietary system of analysis which enables him to pick winners in the penny stock market and make suggestions in his newsletter. Leeds has helped thousands of others achieve their dreams of greater wealth by subscribing to the PeterLeeds.com newsletter.

Media Contact:

To request an interview with Peter Leeds, contact his publicist Anne Howard at 310-295-9578 or write her at anne@annehowardpublicist.com.

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