Price Manipulation:
Brokers manipulate prices by artificially increasing or decreasing
the price of a stock to generate profits. Brokers work deals with
an issuer of stock or with other brokerage firms, to buy it for a
fraction of the price the customer pays. These are usually low priced stocks,
under $5 per share. Once they sell the stock to all the unsuspecting customers, they quit
supporting the stock price and it crashes, leaving the customer with nothing but huge losses.
When a broker is promoting a stock using high-pressure sales techniques
or when he makes promises that seem too good to be true, illegal price manipulation
might be taking place. These techniques are used because there are no fundamental
reasons they can provide to you as to why you should buy. Other times brokers make
blatant misrepresentations about the stock, but unfortunately, you will not learn about these
misrepresentations until it’s too late. Many times, when brokers manipulate the price
of a security, they will refuse or strongly discourage you from selling the stock.
Brokers that engage in price manipulation are liable for your losses.
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