Pump And Dump Schemes

Skip to main content

The .gov means it’s official. Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.

The site is secure. The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Investor.gov U.S. Securities and Exchange Commission

Auxiliary Header

• About Us
• Contact Us
• Follow Us
• Glossary
• Información en Español

Search Investor.gov

Main navigation

• Introduction to Investing
  • Getting Started
    • Five Questions to Ask Before You Invest
    • Understanding Fees
    • Asset Allocation
    • Assessing Your Risk Tolerance
    • Investing on Your Own
    • Working with an Investment Professional
    • Researching Investments
  • Investing Basics
    • Save and Invest
    • Invest For Your Goals
    • How Stock Markets Work
    • Investment Products
    • What is Risk?
    • Role of the SEC
    • Glossary
  • General Resources
    • Investor Alerts & Bulletins
    • Publications and Research
• Financial Tools & Calculators
  • Financial Tools
    • Investment Professional Background Check
    • EDGAR - Search Company Filings
    • Fund Analyzer
    • Retirement Ballpark E$timate
    • Social Security Retirement Estimator
  • Calculators
    • Compound Interest Calculator
    • Calculadora de distribución mínima requerida
    • Calculadora de interés compuesto
    • Savings Goal Calculator
    • Calculadora de objetivo de ahorro
    • Required Minimum Distribution Calculator
    • College Savings Calculator
• Protect Your Investments
  • Fraud
    • Types of Fraud
    • How to Avoid Fraud
    • Resources for Victims
  • Get Help
    • Submit Questions and Complaints
    • Arbitration and Mediation Clinics
• Additional Resources
  • Spotlight
    • Common Scams
    • Crypto Assets
    • Director's Take
    • HoweyTrade
    • Never Stop Learning
    • Public Service Campaign
    • World Investor Week
    • Investing Quizzes
    • Videos
  • Retirement Toolkit
    • First Job
    • Switching Jobs
    • Employer-Sponsored Plans
    • Federal Government Plans
    • Individual Retirement Accounts (IRAs)
    • Managing Lifetime Income
    • Senior Specialist Designations
    • Social Security
    • Avoiding Retirement Fraud
  • Information For:
    • Librarians
    • Older Investors
    • Teachers
    • Military
    • Veterans
    • Youth
    • Entrepreneurs

Breadcrumb

1. Home
2. Introduction to Investing
3. Glossary

Main navigation (glossary)

• Save and Invest
  • Define Your Goals
  • Diversify Your Investments
  • Figure Out Your Finances
  • Gauge Your Risk Tolerance
  • Learn About Investment Options
  • Pay Off Credit Cards or Other High Interest Debt
  • Save for a Rainy Day
  • Small Savings Add Up to Big Money
  • Understand What It Means to Invest
• Invest For Your Goals
• How Stock Markets Work
  • Public Companies
  • Market Participants
  • Types of Orders
  • Types of Brokerage Accounts
  • Stock Purchases and Sales: Long and Short
  • Executing an Order
• Investment Products
  • Auction Rate Securities
  • Bonds or Fixed Income Products
    • Bonds
    • Corporate Bonds
    • High-yield Corporate Bonds
    • Municipal Bonds
    • Savings Bonds
  • Certificates of Deposit (CDs)
  • Closed End Funds
    • Interval Funds
    • Publicly Traded Business Development Companies (BDCs)
    • Publicly Traded Closed-End Funds
  • Commodities
  • Education Savings - 529 Plans
  • Insurance Products
    • Annuities
    • Indexed Annuities
    • Variable Annuities
    • Variable Life Products
  • International Investing
  • Mutual Funds and Exchange-Traded Funds (ETFs)
    • Alternative Mutual Funds
    • Leveraged Loan Funds
    • Exchange-Traded Funds (ETFs)
    • Index Funds
    • Money Market Funds
    • Mutual Funds
    • Smart Beta, Quant Funds and other Non- Traditional Index Funds
    • Target Date Funds
  • Options or Derivatives
  • Private Investment Funds
    • Hedge Funds
    • Private Equity Funds
  • Real Estate Investment Trusts (REITs)
  • Retirement Savings
    • 401(k)
    • 403(b) and 457(b)
    • IRA (Individual Retirement Accounts)
  • Stocks
  • Structured Notes with Principal Protection
• What is Risk?
• Role of the SEC
  • How to Submit Comments to the SEC
  • Researching the Federal Securities Laws Through the SEC Website
  • The Laws That Govern the Securities Industry
• Glossary

Pump and Dump Schemes

In a pump and dump scheme, fraudsters typically spread false or misleading information to create a buying frenzy that will “pump” up the price of a stock and then “dump” shares of the stock by selling their own shares at the inflated price. Once the fraudsters dump their shares and stop hyping the stock, the stock price typically falls and investors lose money.

False or misleading information about a company’s stock price may be spread through sources including social media, investment research websites, investment newsletters, online advertisements, email, Internet chat rooms, direct mail, newspapers, magazines, and radio. Microcap companies are particularly vulnerable to pump and dump schemes because there is often limited publicly-available information about microcap companies.

Learn more.

Featured Content

Investing Quiz - December 2025

Challenge yourself with our most difficult investing quiz and start applying your knowledge of compound interest today!

Is It Time to Rebalance Your Portfolio?

Stay on track to meet your investing goals. Learn about considerations when reviewing and rebalancing your portfolio.

Health Savings Accounts (HSAs)

You can use HSAs to pay for qualified medical expenses. Read our Investor Bulletin to learn more about these tax-advantaged accounts.

What Are Ex-Dividend Dates?

An ex-dividend date is the cutoff date that determines whether you are owed a dividend. Learn more in our glossary.

Never stop learning about investing!

Stay up to date with the latest Investor Alerts & Bulletins, Director’s Take Articles, Quizzes, and the Investor.gov Shares Digest.

Get Email Updates from Investor.gov

Sign up for Investor Updates Enter Email Address

Site Information

• SEC.gov
• MyMoney.gov
• FOIA
• Plain Writing
• Privacy
• Vulnerability Disclosure Policy
• USA.gov
• Disclaimer

Return to Top