Penny Stock Promoter … Chopped! I’m not above a little glee, so let me tell you a little story about a penny stock promoter who was in big trouble right now.
This is a story that is very dear to my heart. I spent years educating my Trading Challenge students about the dangers of penny stock promoters …
Here’s a midnight comedy from the penny stock promoter that broke today. He is one of several promoters who claimed I shorted their pumps even though I NEVER shorted a stock trade at 1-2-3-4-5 cents / share & port. ‘t SHORTED EVERY GAME IN MONTHS! Welcome to the lie of BS promoters pic.twitter.com/iO6g81H3FB
– Timothy Sykes (@timothysykes) March 16, 2021
It sheds light on penny stock pumps and the cons of the following warnings … There are many important lessons traders can learn from this cautionary story.
Listen and learn. Don’t be one of the newbies to be captivated by the obvious lies penny stock promoters tell …
Penny Stock Promoter Blown Up!
On March 15, 2021, the US Securities and Exchange Commission (SEC) issued a press release entitled “SEC Receives Emergency Freezes and Accuses California Traders of Posting False Stock Market Tweets.”
In the press release, they announced allegations of fraud, asset freeze and other emergency relief against Andrew L. Fassari, a trader in Southern California.
According to the SEC complaint, Fassari “used social media to disseminate false information about a defunct company while secretly profiting from it by selling his own holdings in the company”.
And he allegedly used his Twitter account to make false claims about a now defunct weed company, Arcis Resources Corporation (CVEM: ARCS).
The pump starts …
In December 2020, Fassari is said to have bought over 41 million ARCS shares. He then began pumping the stock under the Twitter handle, according to the SEC @OCMillionaire.
He is reported to have claimed that ARCS had seen a revival and expanded its business – all with “huge” investors on board.
Between December 9 and 21, 2020, Fassari reportedly issued around 120 tweets mentioning “$ ARCS” … many inaccurate and / or misleading.
During the period of this alleged pumping, The price of the ARCS share rose by over 4,000%.
But that’s not all! The SEC complaint also notes that Fassari allegedly made statements about its own ARCS deals.
He reportedly sold all of his shares between December 10 and 16, 2020 – and made a profit of $ 929,000. In the meantime, he continued to publish misleading information about ARCS …
Everything is falling apart
The SEC accuses Fassari of violating the anti-fraud provisions of the Federal Securities Act. It seeks permanent injunction, disgorgation, prejudice interest and a civil penalty.
It’s safe to say that many other penny stock promoters are scared.
Many promoters have rushed to delete tweets and accounts since this news was posted … As if that was protecting them.
Overall, I think this story is worth reading as it exposes a pump built on top of total BS.
Not all penny stock pumps are this awesome. But pumps based on truth can also be misleading …
The problem isn’t just penny stock promoters
There is already a lot of distrust of the penny stick niche … Stories like this just perpetuate hatred and ignorance.
Penny stock pumps are very real … they lead newbies to blow up their accounts way too often.
Yes, it is a problem that penny stock promoters make false claims. But it is also a problem that people listen to them.
A lack of education and the wrong attitude can be dangerous for traders. People who blindly follow warnings are more likely to be picked up by such organizers.
I think this story makes a serious argument for the benefits of studying. Well worth taking the time to understand how penny stocks work before you trade!
Do you want to get on the right track? This video is a couple of years old, but it has a lot of great tips on how to choose trades and why I don’t believe the hype …
Is It Worth Being Cynical?
The ARCS debacle is a great example of why I think it’s worth being cynical about the penny stick niche.
I am cynical about every stock I trade. I don’t trust these companies at all. That’s why I’m so careful about holding stocks overnight. You won’t see me hold and hope …
I’ve been on the stock exchange for over 20 years. I made over $ 6.9 million * trading penny stocks on March 17, 2021 …
I’ve seen and changed a lot over the past two decades. So I understand the sneaky games penny stock promoters play.
And I want every retailer to understand this …
Penny stock promoters typically pump up stocks for self-service purposes.
When traders understand this, they learn to take the promoter’s “advice” with a grain of salt.
(* Please note: My trading results and the results of my top students are far from typical. Individual results vary. Most traders lose money. My top students and I benefit from years of hard work and commitment is inherently risky Do your due diligence and never risk more than you can afford to lose.)
Penny Stock Promoter Knowledge is power
You have to learn to be safe in the stock market.
Remember Meyer Blinder, who referred to himself as the “King of the Penny Stock Market”. He eventually went to jail for extortion and money laundering.
Or Jordan Belfort, also known as “The Wolf of Wall Street”, who inspired the film of the same name?
These are big names associated with crazy scandals. But there are many like penny stock promoters and chat room pumpers who don’t have that kind of notoriety.
I try to do what I can to expose the lies I see … But ultimately, knowledge is the best line of defense against anything.
For traders with a strong knowledge base and the right strategy, these pumps do not pose as much of a threat. Traders can even learn to use their systems to their advantage.
Are you ready to build your knowledge base and learn how penny stocks work? Are you ready to approach this niche with a healthy cynicism? Apply for my trading challenge.
Do you understand why following penny stock promoters is so dangerous? Leave a comment and say, “I will not blindly follow warnings!”