Person C: "The company Somotex, according to my Broker, is a company that is about to explode. It will be announcing news tomorrow and according to my broker the stock is going to fly."

The dialogue above is a typical scam which tries to make people think that 3 unrelated people have heard about the same company. Person C has tried to legitimize the company by referring to his broker. The aim of the dialogue is to create excitement relating to a worthless company so that insiders and promoters can sell their stock at inflated prices.

This kind of promotion usually occurs in respect of thinly traded companies whose stock prices can be easily manipulated with false information. Please refer to Tips for Online Investing.

If you hear of any scams in respect of such promoters or companies and you want others to know about them, please submit a complaint at our Complaint Centre or send us an email describing the scam.