Later investors eventually get stuck with losses. Sometimes, the investments don't exist. Other times, they wind up being worth almost nothing. A glossary of popular Internet securities scams Illegal touting. When a promoter praises a stock without disclosing that he is being paid to do so.
Touts drive up demand in a stock by lauding it on bulletin boards or using e-mail.
When the price soars, the touts dump their shares at the inflated price. Newer investors take the hit when the stock inevitably collapses. A marketing ploy in which promoters claim you can profit by sending in small sums of money for signing up, and then get paid to recruit new participants. Later investors eventually get stuck with losses. Sometimes, the investments don't exist.