While "PUMP AND DUMP" may arguably be considered the most prevalent type of penny stock fraud, there are additional modes employed by fraudsters to artificially manipulate the price and volume of securities. The converse of a "PUMP AND DUMP" scheme is a penny stock fraud called the "POOP AND SCOOP". Here the manipulators spread highly negative false rumors about a company in order to drive the price down. As the company's stock plummets, fraudsters buy up additional shares, counting on a rebound in price once the rumor is dispelled. In a related fraud, manipulators first SHORT SELL stock before releasing the rumors. On the subsequent decline, they cover their positions at a profit. Sometimes, company's own management will engage in such actions or employ its associates to do so.
On October 24, 2005, a derogatory press release about feature film "Forget About It" was made by Michael Paloma and his co-conspirators, members of Pine Canyon Enterprises, recently sanctioned by the Department of Financial Institutions and kicked out of business by the Nevada Secretary of State.
PENNY STOCK FRAUD - "POOP AND SCOOP"
PENNY STOCKS EXPOSED