I am new to stock trading and am curious about the legalities of the "pump and dump" tactic.
I see many posts by members on this forum that are "pumping" or generating hype around a stock. It is almost garaunteed that these people invested in the stock befor hyping the stock on forums.
What seperates legal hype from illegal hype? What is the threshhold on the level of exaggeration or level of truth? I have search for some time but can not find a solid answer.
From what I understand it would be legal to make claims on what you believe the stock will do (the stock will jump by x %), but illegal to make up lies regarding supposid facts about the company (such as a pending accusition or investment.)
If someone could shed more light on the matter it would be much appreciated.