About three weeks ago, Robert Edington saw a post on the internet about Graycliff Exploration Ltd. and thought it sounded promising. The Financial News website claimed the small mining exploration company was sitting on $500-million in gold reserves and that its shares were set to jump by 500 per cent.
After watching the price of Graycliff shares run from 80 cents to $2.50 over about 10 trading sessions, Mr. Edington jumped in. “I decided to make a play on April 12,” he said. “It dropped like a rock only hours later.”
Mr. Edington, a semi-retired physician who lives in Peterborough, Ont., now realizes he was likely the victim of a “pump and dump.” In such schemes, con artists acquire shares in a thinly traded stock, and then spread false information that “pumps” up the price and volume.
Taking advantage of artificially high stock prices, scammers then “dump” their stocks, leaving honest investors holding near-worthless securities.
Over the past few months, apparent pump and dumps originating from The Financial News have caused huge volatility in the shares of four small mining companies, three of which trade on the Canadian Securities Exchange (CSE).
For the rest of this article: https://www.theglobeandmail.com/business/article-burned-investors-pump-and-dump-experience-raises-questions-about-iiroc/