Which of the following is a fraudulent activity?
I.Selling stocks on an institution where there is zero external activity.
II.Selling penny stocks as blue chip stocks

Question

Quizplus · Accepted Answer

Both activities listed are forms of investment fraud. Selling stocks on an institution where there is zero external activity is known as a "pump and dump" scheme, where the fraudster artificially inflates the price of the stock by spreading false information, and then sells their shares at a profit when other investors buy in, causing the price to drop. Selling penny stocks as blue chip stocks is known as "bait and switch" and involves misleading investors by misrepresenting the nature or value of the securities being sold. Both actions constitute fraudulent activities.

Which of the Following Is a Fraudulent Activity