Share This Article

Facebook LinkedIn
Twitter Reddit
Print Email
Pinterest Gmail
Yahoo
Money Morning
×
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • Angel Investing
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
  • Retire
    • Income Investing Guide
    • Retirement Articles
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
Login My Member Benefits Archives Research Your Team About Us FAQ
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • Angel Investing
    ×
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
    ×
  • Retire
    • Income Investing Guide
    • Retirement Articles
    ×
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
    ×
  • Subscribe
Enter stock ticker or keyword
×
5 Ways to Beat the Fed (and Crush Inflation)

Email this Article

Send with mail | ahoo instead.
Required Needs to be a valid email
Required Needs to be a valid email
This Penny Stock Scandal Led to a 12-Year Jail Sentence for Its Leader
https://mney.co/2unxT4x
Required Please enter the correct value.
Twitter
Stocks: CYNK

This Penny Stock Scandal Led to a 12-Year Jail Sentence for Its Leader

By Money Morning News Team, Money Morning • July 14, 2017

Start the conversation

Comment on This Story Click here to cancel reply.

Or to contact Money Morning Customer Service, click here.

Your email address will not be published. Required fields are marked *

Some HTML is OK

If you do enough research on penny stock investing, you're bound to run across alarming stories of penny stock scandals that ripped off investors. These scams are more common than you may think, with over 1,300 stocks suspended from trading between 2012 and 2014 for fraud investigations, according toĀ The Wall Street Journal.

Video

3 Strategies for Investing in Penny Stocks

One of the most notorious of these penny stock scams happened just three years ago, and it led to the leader of the scam being sentenced to 12 years in jail.

We'll show you how this scam worked and how to avoid penny stock scams with our two investing tips plus our expert's small-cap stock recommendation...

The Penny Stock Scandal That Led to a 12-Year Jail Sentence

Cynk Technology Corp.Ā (OTCMKTS:Ā CYNK) is arguably one of the biggest penny stock scandals to happen in the last three years.

On June 17, 2014, shares of CYNK skyrocketed 3,650% from $0.06 to $2.25. By the end of July 2014, the share price had jumped another 567% to nearly $15 a share, for a total gain of 24,900% in just over a month.

This insane 24,900% rally gave Cynk a $6 billion valuation in less than two months. But this rally also placed it under the microscope of the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice.

penny stock scandalAlthough Cynk sold itself as a professional social media company, the SEC investigation found it to be a shell company. These are firms that don't make any revenue and haven't reported any physical assets. Cynk's only purpose as a shell company was to create a $300 million pump-and-dump scam that involved at least 100 investors.

CYNK eventually crashed, and by Sept. 11, 2014, the stock was trading for just $0.20 per share. That was less than 1/100th of its mid-July peak of $21.95.

In June 2015, the leader behind the penny stock scandal, a California man namedĀ Gregg Mulholland, was arrested.

Trending:Ā This Safe Penny Stock Will Double Your Money - and Save a Dying Industry

Mulholland created the scheme by arranging a network of investors for the purpose of manipulating CYNK's stock price for his own profit. Once the heavily promoted CYNK lured enough buyers, he sold his position at the higher price for a reported profit near $300 million.

In February 2017, nearly two years after his initial arrest, Mulholland was sentenced to 12 years in prison for his role in the Cynk penny stock scandal.

Despite horror stories like the Cynk scandal, these scams can be easy to avoid with our two simple tips. They will help guide you when looking for the best penny stocks to buy this year.

Here are our two must-know tips for safe penny stock investing...

Join the conversation. Click here to jump to comments…

Login
guest
guest
0 Comments
Inline Feedbacks
View all comments
LIVE
Visit Money Morning Live


Latest News

January 19, 2023 • By Money Morning Stock Research Team

These Stocks Could Go To $0

January 9, 2023 • By Money Morning Stock Research Team

The Government Is Pouring $391 Billion Into These Stocks - Buy Now

December 27, 2022 • By Money Morning Staff Reports

6 IPOs in 2023 You Can’t Afford to Miss
Trending Stories
ABOUT MONEY MORNING

Money Morning gives you access to a team of market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

QUICK LINKS
About Us COVID-19 Announcements How Money Morning Works FAQs Contact Us Search Article Archive Forgot Username/Password Archives Profit Academy Research Your Team Videos Text Messaging Terms of Use
FREE NEWSLETTERS
Total Wealth Research Power Profit Trades Profit Takeover This Is VWAP Penny Hawk Trading Today Midday Momentum Pump Up the Close
PREMIUM SERVICES
Money Map Press Home Money Map Report Fast Fortune Club Weekly Cash Clock Night Trader Microcurrency Trader Hyperdrive Portfolio Rocket Wealth Initiative Extreme Profit Hunters Profit Revolution Warlock's World Penny Nation Quantum Data Profits Live Trading Alliance Trade The Close Inside Money Trader Expiration Trader Vega Burst Trader Flashpoint Trader Darknet Hyper Momentum Trader

Ā© 2023 Money Morning All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning.

Address: 1125 N Charles St. | Baltimore, MD, 21201 | USA | Phone: 888.384.8339 | Disclaimer | Sitemap | Privacy Policy | Whitelist Us | Do Not Sell My Info

wpDiscuz