From a reader: Former Governor Pataki engaging in pump and dump penny stocks

Robert Brennan, First Jersey Securities, needs an assistant while he's in jail

The idea of penny stocks is simple: buy an existing shell company (no assets) for practically nothing, issue millions of new shares, give a bunch of them for free to yourself and other promoters and then sell the balance to the public via boiler room operations (the guys who call you during dinner). When the price goes from, say, $0.05 to $3.00, everyone who’s in on the scam dumps their shares and quits pumping, whereupon the artificially inflated price returns to its actual value: zero.

There’s absolutely nothing new about this plan; my own Dutch ancestors probably sold worthless shares of crud to Fudrucker’s relatives, newly arrived from Ireland,  so it’s doubly disappointing that Governor Pataki would choose to enrich himself this way. Al D’Amato, who abused his Senate position as Banking Czar to keep the boiler room operation, Stratton Oakmont, alive for years, was always known to be a crook. I’d thought, naively obviously, that Pataki was a better man.


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2 responses to “From a reader: Former Governor Pataki engaging in pump and dump penny stocks

  1. I guess this pretty much rules out running against Kirsten Gillibrand for Hillary’s old Senate seat. Oh well.

  2. Anon E. Moose

    Senator? I think many are voting with their wallet by pursuing the private sector (think Giuliani). Plus the ability to tell a nosy reporter “That’s none of your damn business” must have some value; it would to me.