Outsmart a "pump and dump" scam?

Question

Is it possible to profit off a pump a dump scam (like those faxes and emails telling you to buy some penny stock which is worthless) Because you know that the stock is going to go up, so that the scammers can profit, but if you weren' stupid couldn't you buy and then sell before the scammers dump it? Because these penny stocks are traded OTC can the company prevent you from selling shares? Thanks.

Answer 1

Publically trading companies have not control over the market place of the shares nor can control who are the buyers or who are the sellers nor can they prevent any one from buying their shares or prohibiting shareholders from selling.

The pump & dumper often times damage the market and possibly the company

Answer 2

tough to short microcaps, which is the only real way to make any money with this.

i guarantee you that every single investor that falls victim to the spam thinks that they'll be the one that will be able to get out on top.

Answer 3

I think not. You assume that the stock has to go up since it is being pumped.

But you can't assume that. Often, the scammer has already bought THEIRS at a lower price and only needs you to buy them out.

Sometimes they created a phony stock that has no assets so anything they get from you is profit.