It is not often that penny stocks—and the pump-and-dump fraud schemes to which they are vulnerable—receive much attention beyond the blogs and chat rooms that cover the Wild West of over-the-counter micro-caps. And then along comes CYNK Technology.
It remains undetermined if fraudulent activity allowed CYNK's shares to peak over 36,000 percent before Friday's trading halt from the Securities and Exchange Commission. If the stock were manipulated, however, it would represent the latest in a constantly evolving scam: the "pump and dump," which was made famous in part by Jordan Belfort, the so-called "Wolf of Wall Street."
But former federal prosecutor Joel Cohen, who led the criminal investigation against Belfort as an assistant U.S. attorney, said the days of boiler rooms and high-pressured stock telemarketing are gone, and that we are seeing the Gen Y of pump and dump.