Loved the movie but never understood how he was “scamming people”
Wasn’t he just selling stocks?
In: 122
He was selling stocks by hyping up their value to way way more than they were actually worth, and making a 50% commission on every share of stock he sold.
He would buy worthless stocks of companies that weren’t even worth a dollar (also called “penny stocks”). Once he had a lot of these worthless stocks sitting with him, he would have his guys cold-call people and hype up the stocks by false and misleading statements, which would make those people want to invest in them
Those people would buy a large number of the stocks ($5000 worth of stocks, in some instances). Such a large influx of buyers would drive up the stock price.
At this point he would sell his own shares of stock and cash out. Once he did that, his sales guys would stop hyping the stock up, causing the stock price to crash, and the investor to lose a huge amount of money. Imagine investing $5000 and getting 50 cents or less in return.
This is very very illegal, and is called “Pump and Dump.”
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