There is a penny stock pump and dump scam currently circulating on the Internet. A pump and dump scheme is when someone tries to push up the price of a stock so that they can sell into the rally. This pump and dump scam is being perpetuated by NIA, the National Inflation Association.
The NIA generally gives pretty good information. Their rhetoric is pretty good. Mostly this is because they take Peter Schiff’s material word for word. They put out good information, but the whole reason for their existence is to build a database that they can use to scam by promoting garbage penny stocks.
The stock that they are pumping is called Mega Precious Metals (MGP). At the time that they recommended it, it was at a 52-week low. This is a junior gold exploration company. They don’t produce any gold or have any gold, they are just trying to find it.
NIA put a disclaimer on their recommendation saying that investors should not rely on their recommendation. That is buried in their disclaimer, but you probably cannot disclaim yourself out of fraud. Anyone who was taken in by this pump and dump scam might want to look into a lawsuit against this company.
NIA said that the market was currently valuing MGP’s gold resources at $14 per ounce. But these were inferred resources. Inferred resources don’t mean anything, and NIA knows it. This company doesn’t have any gold, and they know it.
They also said that MGP’s share price is at 50% of the price at which investors bought stock just a few months ago. But these people probably invested with the full knowledge that they could lose the entire investment and that it is highly speculative.
NIA claimed that MGP is an undervalued, undiscovered “gem”, and that its value will skyrocket once the investment community discovers it. They are saying that you can get in early before Wall Street finds out about this stock and sends its price upwards.
Why would they recommend this stock unless they were paid? Once this piece came out, the stock shot up on heavy volume. But who did all the selling? We know who bought the stock, but someone had to sell it to them.
Behind the NIA is notorious penny stock pump and dumper Jonathan Lebed. He pulled off a pump and dump scam when he was in high school. He started this company to build a list of people who they know are predisposed to be interested in gold stocks so that they can scam them.
If you haven’t bought this stock yet, don’t do it. If you did buy it, maybe you can still get rid of it. There may still be some bidders out there. You may also want to contact a lawyer to explore your legal options.