When you suddenly hear great things about a company and its success, the positive reports might induce you to buy its stock. If it turns out later that all the rosy statements were not true, and stockholders start quickly selling, you could lose money when the stock falls to a more realistic price. You may have been the victim of a classic Pump-and-Dump scheme.
When you lose money due to securities fraud, contact Silver Law Group for help. We represent investors all over the country who have suffered losses due to fraud, including through class action litigation. Our highly experienced Pump-and-Dump lawyers can help you recover the funds you lost due to misleading indicators, improper sales pitches, and breach of fiduciary duty by financial advisors.
Pump-and-Dump schemes are a form of investment fraud. The goal for the fraudster is to artificially inflate the price of securities temporarily, allowing them to profit before the price returns back to typical levels
Typically, the scam operators strategically release favorable information about a company and its stock to create a buzz that induces individual investors to buy. The information is often false, exaggerated, or misleading. This is the “pump,” the spreading of misleading information to create a demand that inflates the price of the stock.
Fraudsters who already hold the stock will wait for price to rise. When the price appears to be at or near its peak, they unload their holdings—the “dump”—and reap profits from the artificially inflated price. When they dump their stock, the price usually falls, and investors who got caught up in the manufactured excitement have lost their money. If you believe you were scammed in this way, contact the Pump-and-Dump attorneys at Silver Law Group to discuss a legal response.
Pump-and-Dump schemes often target retail investors. A single investor’s losses might be a couple thousand dollars or tens of thousands. Sometimes people risk their entire life savings and lose all of it.
If you must finance a lawsuit against the fraudsters, the cost relative to the possible return might be high. The law provides a remedy for that problem: the class action securities lawsuit.
If numerous investors suffer losses for similar reasons, courts may consolidate the investors’ claims. The court only needs to hear the evidence once, and the defendants only need to defend themselves once. Silver Law Group handles securities fraud cases on a contingency basis, so there is no up-front cost for an investor to join the class action and pursue their claim.
Prosecutors occasionally bring criminal charges against perpetrators of Pump-and-Dumps; but even when successful, it does not get your money back.
Class actions give investors the opportunity to hold scammers accountable in civil court. The burden of proof is lower in the civil arena, making it easier to prove wrongdoing. When many victims of the scheme band together in a class action, there is a powerful incentive for the fraudsters to settle the case. Silver Law Group has an excellent record of achieving favorable settlements for investors who were defrauded.
Members of the class usually share the settlement or verdict amount in proportion to their losses. For example, someone who lost $100,000 in the Pump-and-Dump will typically receive four times as much as someone who lost $25,000, regardless of the payout. The investors share the costs of litigation in the same manner, although the scammers often must cover or contribute to litigation costs and attorneys’ fees.
Losing your hard-earned money to an unlawful scheme is outrageous. Participating in a class action lawsuit could help you get your money back. Silver Law Group has extensive experience pursuing claims against fraudsters, Ponzi schemers, stockbrokers, financial advisors, and third-party professionals that assist the scheme.
Silver Law Group represents defrauded investors all over the country who have been victimized by strategic omissions or coordinated schemes. A Pump-and-Dump lawyer with our firm will advocate vigorously to recoup your investment. Reach out today to discuss your legal options.
