DECISION INSIGHT (chapter 13 Accounting for Corporations; 22nd ed Wild)

PUMP 'n DUMP Fraudulent information can be used by the owners of a company's stock to pump it up and claim it as undervalued, which causes naive investors to seek to acquire the stock and drive up its price. After that, those behind the release of fraudulent information dump the stock at an inflated price. When later information reveals that the stock is overvalued, its price declines and investors still holding the stock lose value. This scheme is called pump 'n dump. Jonathan Lebed, at 15 years old, allegedly made about $1 million in one of the most infamous cases of pump 'n dump.

1. Which corporations have been involved in "pump 'n dump" schemes?

2. Who are the victims of these kinds of schemes?

3. What can be done to decrease their occurrence?