Pump and Dump

Market Terms

We don't know everything about the markets.  We're just devoted to learners.  Taken from those smarter than ourselves, here's how we define Pump and Dump.

A fraudulent practice of encouraging investors to buy shares in a company in order to artificially inflate the price and sell one’s own shares when the price is high.  Generally, a stock is boosted by a party who has an established position through false, misleading, or substantially exaggerated promotions or recommendations.  Historically, pump and dump schemes were done through cold calling, but have become even more prevalent with the arrival of the internet.  Creating a pump-and-dump scenario is illegal and is considered a form of securities fraud.