Penny Stocks: How to Spot a Pump-and-Dump Scheme

The “pump and dump” scheme, hyping up the shares of – usually – an extraordinarily small company and then cashing in at the top, is all too common in penny stocks and pink sheet issues. While penny stocks are generally best avoided to begin with, what are some fairly good signs that a pump-and-dump scheme is underway so that investors can avoid them? I’m looking for commentary on this topic, either emailed or in a quick phone chat. I have a few signs I already plan on mentioning in the article that I’d welcome commentary on – if you’re emailed about a penny stock, if you then look up said stock and see it shooting up at the same time, if you otherwise see a penny stock being heavily hyped on social media – but any additional signs not just mentioned are also welcome.