We represent investors who suffer losses as a result of investments in penny stocks. Penny stocks are securities that are not listed on a national securities exchange like the NYSE or NASDAQ, and are usually quoted on the over-the- counter (OTC) markets, formerly known as Pink OTC Markets Inc.
They are priced under $5.00 per share, but most trade well under a dollar, and many trade below a penny.
While penny stocks generally are quoted over-the- counter, they may, however, also trade on securities exchanges, including foreign securities exchanges, and penny stocks can include the securities of certain private companies with no active trading market.
Penny stocks are often associated with fraud, unregistered securities offerings, price manipulation, and/or pump-and- dump schemes. Pump-and- dump schemes boost and tout the company’s stock via false and misleading statements to the marketplace. Such promotion can be found on social media platforms and on internet bulletin boards and chat rooms.
Potential investors then see messages posted that urge readers to buy a stock quickly or to sell before the price goes down, or a telemarketer will call using the same sort of pitch, according to the SEC.
Pump-and- dump fraudsters might also claim to have “inside” information about an impending development or implement an “infallible” combination of economic and stock market data to pick stocks. They may simply, in reality, be company insiders or paid promoters looking to gain by selling their shares after the stock price shoots up by the ensuing buying frenzy they create.
After these fraudsters “dump” their shares and stop hyping the stock, the price typically falls, and investors lose their money, according to the SEC.
If you believe you may have lost money as a result of investing in penny stocks, please contact us for a free, no obligation consultation regarding your legal situation and potential recovery options, by phone at 888-998- 0530, via email at email@example.com, or through the contact form on this page.