An old stock scam with a new gimmick is ensnaring investors and has pushed up the share price of a local biotech company, prompting the Securities and Exchange Commission to warn the public. The classic “pump-and-dump” scheme, in which promoters hype a stock to build up its price and then sell their shares before the price plummets has been updated. People checking their cell phone voice mail and home answering machines are finding a message from a woman who has apparently misdialed and, unaware of her mistake, left a stock tip for a friend. The well-crafted subterfuge even has the woman making chewing noises and apologizing for eating. The stock the woman tells her friend to buy is one sold on lightly regulated and thinly traded exchanges, called the pink sheets and the Over-the-Counter Bulletin Board. “The SEC staff attorney who is working on this told me that there are five companies that are being touted this way, and none of the companies know anything about it,” said Irving Einhorn, a Manhattan Beach, Calif., attorney who represents one of the companies, Power 3 Medical Products in The Woodlands. The SEC declined to identify the companies being promoted through the scheme.
