Is this illegal..

Question

The Cavan thread got me thinking..The stock is at 4 cents a share..Let's say one of the owners off the company takes $100,000 of his own money and buys up a s h i t load of shares under his mom's account/name.

People notice that the stock is being bought, so they jump on board, the price of the stock rises to 6 cents, he dumps them at 6 cents and makes 50% on his money.

Is that legal? Is it even possible to buy enough shares so that people notice, even at 4 cents?

Dutch1976 · Answer

The Cavan thread got me thinking..The stock is at 4 cents a share..Let's say one of the owners off the company takes $100,000 of his own money and buys up a s h i t load of shares under his mom's account/name.

People notice that the stock is being bought, so they jump on board, the price of the stock rises to 6 cents, he dumps them at 6 cents and makes 50% on his money.

Is that legal? Is it even possible to buy enough shares so that people notice, even at 4 cents?

Raiders22 · Answer

[Quote: Originally Posted by Dutch1976] &#xD;&#xA;The Cavan thread got me thinking..The stock is at 4 cents a share..Let&#x27;s say one of the owners off the company takes $100,000 of his own money and buys up a  s h i t  load of shares under his mom&#x27;s account/name.&#xD;&#xA;People notice that the stock is being bought, so they jump on board, the price of the stock rises to 6 cents, he dumps them at 6 cents and makes 50% on his money.&#xD;&#xA;Is that legal? Is it even possible to buy enough shares so that people notice, even at 4 cents?&#xD;&#xA;[/Quote]&#xD;&#xA;In this example, he doesn&#x27;t need his mom.  If he is not trading on info that is not made public or falls under insider trading regulations.

Knoxpoker · Answer

Listen If you only buy 1 share it will raise the price.. If you have a stock at 4 cents and you buy 1 share at 5 sents , the stock will now be worth 5 cents .. If you look at your level 2 or just a basic trading platform , the price you see is last price traded..If you buy 100,000 shares or 1 share the last price traded will be the same ...

Listen daytraders trade gap ups, and gap downs. very simple .If A stock gaps up or down it will show up in there trading sorftware/ alert system. That is how real traders day trade ..

Knoxpoker · Answer

and to answer your question about "him dumping it for 6 cents " he has to find a buyer to dump his 100,000 shares . very hard to do when there is such low volume .. Unless he hits the FOK button and gets to dump all the shares at once , it will be awile before he can get rid of all the 100,000 shares..

Is this illegal..

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