‘Caveat emptor’ to those who buy penny stocks pumped by celebrities

Recently, rapper 50 Cent (Curtis Jackson) told his millions of followers on Twitter to go out and buy shares of an obscure Florida company that distributes headphones. The stock price rose to $.39, up 290 percent, after his tweets, before falling again. He’s not the only celeb pitching penny stocks, says Pro Publica’s Jesse Eisenberg in a story published by MSNBC.: “Carmen Electra, the Playboy model turned actress, has made a habit of pitching bulletin board stocks. A few months ago, the Securities and Exchange Commission sued the guy who played the blond partner of Erik Estrada in the 1970s cop-show ChiPs, charging him with securities fraud (he recently pleaded guilty in a related criminal case and was given probation). Even Shaquille O’Neal, the NBA star with a massive Twitter following, has promoted a microcap stock that he owned, which subsequently plummeted,”  But, the article warns: “it’s amazing that the penny stock market, a Petri dish of fraud, exists at all. It’s caveat emptor all the way.

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