The Eight Steps of the Stock Fraud Sting!
The Players are assembled and ready to perform the sting.
Step One. The “victim” public company is selected from among the thousands of OTC stocks. Several people serving as “shills” or “bashers” are hired to begin posting on the various forums and message boards. They pretend to be interested shareholders. These people are very knowledgeable and articulate and know how to blend in and not raise suspicions. The important thing to know is that they are hired assassins paid for by the Hedge Funds or their brokers.
Step Two. The targeted “victim” company puts out a press release containing good news, such as good earnings, or a technological breakthrough. The news is well accepted, sometimes the financial press and analysts write favorably. The share price rises accordingly.
Step Three. Without owning a single share, the Hedge Funds, working through their brokers begin selling shares as the price rises. This is classic Naked Short Selling. Initially, they don’t sell faster than the market will take it, but they do sell every share they possibly can as long as the price continues to rise.
Step Four. The bashers begin posting to the message boards false and negative stories, but laced heavily with truth, thereby causing confusion and doubt.
Step Five. As the buying pressure that was causing the upside movement in the stock price starts to weaken, the bashers quicken their pace of negative news, and the Hedge Funds, through their brokers, increase their selling. Now instead of waiting for buyers to initiate the transactions, they become aggressive sellers, selling into the market driving the price down.
Step Six. This is the point of no return for the Hedge Funds that have orchestrated the assassination of the stock of this company. The Hedge Funds are now committed to driving the price down no matter how many shares they have to sell. Remember, these are shares they don’t own—they are nakedly short selling. Their stacked deck that gave them 4 Aces, is their knowledge that they have really deep pockets to cover some of their naked shorts if forced in the interim.
Step Seven. However, as long as they can keep driving the price down lower and lower every time they do this, they will never have to cover their naked short positions and never have to deliver the shares they have sold.
Step Eight. Many companies have experienced a 99.9% drop in share price in just a matter of months. Ultimate goal of the Hedge Funds is to drive the prices continually down, down, down into oblivion, until finally the company fails, takes out bankruptcy, ceases to exist, the stock stops trading and never trades again. Ultimate victory—they may have sold hundreds of millions of dollars of stock and never deliver a single share to complete the transactions
The Players are assembled and ready to perform the sting.
Step One. The “victim” public company is selected from among the thousands of OTC stocks. Several people serving as “shills” or “bashers” are hired to begin posting on the various forums and message boards. They pretend to be interested shareholders. These people are very knowledgeable and articulate and know how to blend in and not raise suspicions. The important thing to know is that they are hired assassins paid for by the Hedge Funds or their brokers.
Step Two. The targeted “victim” company puts out a press release containing good news, such as good earnings, or a technological breakthrough. The news is well accepted, sometimes the financial press and analysts write favorably. The share price rises accordingly.
Step Three. Without owning a single share, the Hedge Funds, working through their brokers begin selling shares as the price rises. This is classic Naked Short Selling. Initially, they don’t sell faster than the market will take it, but they do sell every share they possibly can as long as the price continues to rise.
Step Four. The bashers begin posting to the message boards false and negative stories, but laced heavily with truth, thereby causing confusion and doubt.
Step Five. As the buying pressure that was causing the upside movement in the stock price starts to weaken, the bashers quicken their pace of negative news, and the Hedge Funds, through their brokers, increase their selling. Now instead of waiting for buyers to initiate the transactions, they become aggressive sellers, selling into the market driving the price down.
Step Six. This is the point of no return for the Hedge Funds that have orchestrated the assassination of the stock of this company. The Hedge Funds are now committed to driving the price down no matter how many shares they have to sell. Remember, these are shares they don’t own—they are nakedly short selling. Their stacked deck that gave them 4 Aces, is their knowledge that they have really deep pockets to cover some of their naked shorts if forced in the interim.
Step Seven. However, as long as they can keep driving the price down lower and lower every time they do this, they will never have to cover their naked short positions and never have to deliver the shares they have sold.
Step Eight. Many companies have experienced a 99.9% drop in share price in just a matter of months. Ultimate goal of the Hedge Funds is to drive the prices continually down, down, down into oblivion, until finally the company fails, takes out bankruptcy, ceases to exist, the stock stops trading and never trades again. Ultimate victory—they may have sold hundreds of millions of dollars of stock and never deliver a single share to complete the transactions
