The alleged manipulation of Millennium stock was A.S. Goldmen's last endeavor before the firm went dormant in October. In Goldmen's case, prosecutors say Marchiano and insiders gave money to friends and family to set up dummy accounts so they could skirt regulations and control low-priced stock warrants. A warrant is an option to buy discounted stock during a fixed time frame. Then the family member or friend would withdraw the profits from the bogus account and repay the A.S. Goldmen employee in cash. The market for the stock is thin, meaning there's no broad public interest in the stock to fuel the market price.
Public information is often scarce.
Brokers will refuse to let customers sell shares and restrict the supply. The effect is a pump of the price. Later, when the price is pumped high enough, the insiders and favored customers will dump the stock, making large profits. Meanwhile, the dump creates an unstoppable price slide and regular investors get wiped out. Hyping Stadium Naples Marchiano fled authorities in New York and moved to Naples in 1996, prosecutors say.