{"id":1738,"date":"2011-02-14T21:40:53","date_gmt":"2011-02-15T02:40:53","guid":{"rendered":"http:\/\/selfinvestors.com\/tradingstocks\/stocks\/stock-manipulation-is-real-types-of-scams\/"},"modified":"2011-02-14T21:42:50","modified_gmt":"2011-02-15T02:42:50","slug":"stock-manipulation-is-real-types-of-scams","status":"publish","type":"post","link":"https:\/\/selfinvestors.com\/tradingstocks\/stocks\/stock-manipulation-is-real-types-of-scams\/","title":{"rendered":"Stock Manipulation Is Real, Types Of Scams"},"content":{"rendered":"

The following article courtesy of ForexTraders.com..<\/strong><\/p>\n

\u201cBuy on the rumor, sell on the news\u201d is an overused phrase in the investment community, but before an investor takes this advice to heart, he should also verify the sources and confirm the validity of the messages that he receives. This last part of prudent counsel often gets lost in the shuffle of buy and sell orders, but it may be the only protection that an investor has when it comes to detecting obvious stock manipulation techniques employed by those bent on deceit.<\/p>\n

Stock manipulation<\/a><\/u> is also a favorite topic of the \u201ctalking heads\u201d on financial news channels. Fraud openly exists, despite the efforts of regulatory and law enforcement officials to stamp it out. A sad testimony to risk management efforts is that fraud can never be completely eliminated, but must be tolerated at an acceptable level as a cost of doing business. The forex<\/a><\/u> market is, perhaps, the only market we have that is less prone to manipulative tactics due to its shear volume, now at $4 trillion a day and counting. Even the largest hedge funds with their sophisticated forex trading platforms<\/a><\/u> or even central bankers are unable to artificially drive the market in one direction or another, though their efforts to do so are widely publicized.<\/p>\n

<\/p>\n

Stocks, however, are much easier targets. After Ted Cramer, the well-known television host of \u201cMad Money\u201d, admitted in a 2007 interview with TheStreet.com that he was guilty of manipulating stock values during his employment days at a major hedge fund, numerous articles were written on the topic as if it were new news. His direct quote was quite telling when he stated, \u201cWhat\u2019s important when you are in that hedge fund mode is to not do anything remotely truthful, because the truth is so against your view, that it\u2019s important to create a new truth, to develop a fiction.\u201d The \u201cYouTube\u201d link to the video was subsequently overrun, but it is not difficult to locate it with a current search engine.<\/p>\n

The \u201cFlash Crash\u201d last May resurrected the topic, and the report and actions taken by the SEC have not restored investor confidence<\/a><\/u>. However, a recent resurgence in positive performance by the Dow, S&P 500, and the NASDAQ may have quelled a complete retreat by \u201c401K\u201d funds invested in stocks, but when optimism and favorable news reports<\/a><\/u> abound, the circumstances that favor stock manipulation abound in lock step.<\/p>\n

It is time once again to be wary of the following schemes designed to defraud:<\/p>\n