First time posting

smp1965 · #1 (**permalink**) 01-15-09, 11:34 PM

Hello,

First time posting. I signed up because I have been unable to find out the answer to a couple of questions I have about a proposition that was communicated to me last week.

Here it goes: A person (that I do know for a while) presented me an "opportunity" to make a rather good amount of potential profit with an stock that will resume trading on the Pink sheets after a symbol change next month.

This is how he explained it to me: I send a person $10,000. This person would treat it as a short term loan. This person would send me back a document that both of us sign stating the terms of the repayment. However, instead of me being paid back in cash, this person would use the money to purchase shares of this stock at a substantial discount (.30 cents vs. .85 cents per share) after the symbol name changes, BUT BEFORE the stock official starts to trade ( This is NOT an IPO). This person would then wire or transfer these shares into my brokerage account.

Obviously, this means I would already have a substantial profit "built in" before the stock trades and then potentially much more in the short term.

Is this legal and/or possible to do? I asked this person many question about this and they assured me it was totally legal to do

Stocktrading101 · #2 (**permalink**) 01-16-09, 04:10 PM

This sounds like an extremely fishy operation and I would definitely not participate. No money comes that easy!

How does your friend understand this process? As he done it himself before? Is he a broker?

Personally IMO you are asking to have your $10k taken from you.

smp1965 · #3 (**permalink**) 01-16-09, 04:18 PM

Thanks for the advise. He also mentioned that the money I give would be setup like a convertible note/loan where the terms of the agreement would be spelled out including the amount of shares that would be given back to me. I guess this is an example of a private securities transaction.

Stocktrading101 · #4 (**permalink**) 01-16-09, 04:25 PM

Ya I dunno its sounds extremely fishy. Think about it this way, if he knows this grand opportunity to in theory overnight triple his money (assuming he sells the first day), why the hell is he telling you or anyone about it?

IF it actually was true and legitimate he should be going out to banks and getting any physical loan known to man because of the instant return he will have.

These types of offers are so often scams it is unbelievable. Look at the Madoff Scandall, $50 billion ponzi scheme. If it sounds too good to be true, it probably is.