Penny stock promoter … busted! I’m not above a little schadenfreude, so let me tell you a little story about a penny stock promoter who just found himself in big trouble.
This is a story that’s near and dear to my heart. I’ve been educating my Trading Challenge students about the dangers of penny stock promoters for years…
Here's some midnight comedy from the penny stock promoter busted today, he's one of several promoters who claimed I shorted their pumps when in fact I've NEVER shorted any stock trading at 1-2-3-4-5 cents/share & haven't shorted ANY PLAY IN MONTHS! Welcome to how BS promoters lie pic.twitter.com/iO6g81H3FB
— Timothy Sykes (@timothysykes) March 16, 2021
It sheds some light on penny stock pumps and the downside of following alerts … There are a lot of important lessons traders can learn from this cautionary tale.
Listen and learn. Don’t be one of the newbies who gets sucked in by the blatant lies penny stock promoters tell…
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Penny Stock Promoter Busted!
On March 15, 2021, the U.S. Securities and Exchange Commission (SEC) issued a press release entitled “SEC Obtains Emergency Asset Freeze, Charges California Trader with Posting False Stock Tweets.”
In the release, they announced fraud charges, an asset freeze, and other emergency relief against Andrew L. Fassari, a trader in Southern California.
According to the SEC complaint, Fassari allegedly “used social media to spread false information about a defunct company, while secretly profiting by selling his own holdings of the company’s stock.”
And he allegedly used his Twitter account to make false claims about a now-defunct company in the weed sector, Arcis Resources Corporation (CVEM: ARCS).
The Pump Begins…
In December of 2020, Fassari is alleged to have purchased over 41 million shares of ARCS. According to the SEC, he then began pumping the stock under the Twitter handle @OCMillionaire.
He’s said to have made claims that ARCS was making a revival and expanding its business — all with “huge” investors on board.
Between December 9 and December 21, 2020, Fassari allegedly issued about 120 tweets that mentioned “$ARCS” … many false and/or misleading.
During the time period of this alleged pumping, the ARCS share price went up over 4,000%.
But that’s not all! The SEC complaint also notes that Fassari allegedly made statements about his own ARCS trades.
Between December 10 and 16, 2020, he allegedly sold all of his shares — and made a profit of $929,000. Meanwhile, he continued to publish misleading information about ARCS…
Everything Comes Tumbling Down
The SEC is charging Fassari with violating the antifraud provisions of the federal securities laws. It seeks a permanent injunction, disgorgement, prejudgment interest, and a civil penalty.
It’s safe to say a lot of other penny stock promoters are spooked.
A lot of promoters have been rushing to delete tweets and accounts since this news broke … As if that’s gonna protect them.
Overall, I think this story is worth reading about because it exposes a pump that was built on utter BS.
Not all penny stock pumps are so blatant. But even pumps that are based on truth can be misleading…
The Problem Isn’t Just Penny Stock Promoters
There’s already a lot of mistrust about the penny stock niche … Stories like this just perpetuate the hate and ignorance.
Penny stock pumps are very real … They lead newbies to blow up their accounts way too often.
Yes, it’s a problem that penny stock promoters are out there making false claims. But it’s also a problem that people are listening to them.
A lack of education and the wrong mindset can be dangerous for traders. People who blindly follow alerts are far more likely to be taken for a ride by promoters like this.
I think this story makes a serious case for the benefits of studying. It’s worth taking the time to understand how penny stocks work before you trade!
Wanna get on the right track? This video is a few years old, but it has a lot of great tips about how I choose trades and why I don’t believe the hype…
Does It Pay to Be Cynical?
The ARCS debacle is a great example of why I think it pays to be cynical in the penny stock niche.
I’m cynical of every stock I trade. I don’t trust these companies at all. That’s why I’m so wary of holding stocks overnight. You won’t see me holding and hoping…
I’ve been in the stock market for 20+ years. I’ve made over $6.9 million* trading penny stocks as of March 17, 2021…
I’ve seen a lot over the past two decades and change. So I understand the sneaky games penny stock promoters play.
And I want every trader to understand this…
Penny stock promoters usually pump up stocks for self-serving purposes.
When traders understand this, they learn to take the promoter ‘advice’ with a grain of salt.
(*Please note: My trading results, along with the results of my top students are far from typical. Individual results will vary. Most traders lose money. My top students and I have the benefit of many years of hard work and dedication. Trading 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 stay safe in the stock market.
Remember Meyer Blinder, who described himself as “king of the penny stock market” … Eventually, he went to prison for racketeering and money laundering.
Or Jordan Belfort, aka “The Wolf of Wall Street,” who inspired the movie by the same name?
Those are big names attached to some crazy scandals. But there are plenty 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, the best line of defense against it all is knowledge.
For traders with a strong foundation of knowledge and the right strategy, these pumpers don’t pose so much of a threat. Traders can even learn to use their schemes to their advantage.
Are you ready to build your knowledge account and learn how penny stocks work? Are you ready to approach this niche with a healthy sense of cynicism? Consider applying for my Trading Challenge.
Do you understand why it’s so dangerous to follow penny stock promoters? Leave a comment and say, “I will not blindly follow alerts!”