It is not illegal for a promoter to receive cash or securities if the payment is disclosed, but consider it a big red flag. Stocks with few shares are easy for promoters to manipulate and hard for investors to sell if the price starts falling. It is tougher to track money sent abroad, and harder for burned investors to have recourse to justice. 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.