Penny Stock Fraud

know several people who went to see The Wolf of Wall Street and expressed some measure of disbelief with some of the characters and events in the movie.  Well I went to see the flick and I can assure those doubters that a lot of that stuff really did go on.  Now I can’t attest to the drugs and sex since the places at which I worked on The Street didn’t tolerate any of that (at least to my knowledge).  However, the extent of the rah-rah salesmanship and the pushing of junk pink sheet stocks, for which brokers got paid extra large commissions, was absolutely true. Indeed, Stratton Oakmont was not the only firm that engaged in touting pink sheet and other low priced stocks to naive investors.  There were lots of them during the 1980’s that were commonly referred to as bucket shops.  Rooms filled with young brokers who spent the day cold calling people in the hopes of getting them hooked on these junk stocks by promising huge returns.  Of course these “huge returns” rarely if ever materialized and most of these folks were left holding the bag while the firms that pushed this shoddy merchandise got rich.

Today most of these firms are gone but pink sheet stock fraud is alive and well. There are countless so-called “newsletters” that push penny stocks on the Internet and they are usually just unscrupulous promoters who work with the management of companies that are essentially frauds. To be sure, some micro-cap companies can make you money but the vast majority are just SCAMS so I urge all my readers to take a word of advise from a former Wall Street analyst.  Never invest in a pink sheet stock unless you are prepared to lose all your money.  Go buy a lottery ticket instead!!!

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