Investor's Watchdog.com: Stock, finance and investment protection for investors

The U.S. Securities and Exchange Commission has charged securities lawyer Stephen Czarnik of assisting with multi-million pump-and-dump stock schemes which “allowed three stock promoters — Ryan Reynolds, Jason Wynn and Carlton Fleming — to purchase millions of shares of stock in three penny stock companies for pennies per share, hype the companies through promotional mailers and other advertising, and illicitly sell their shares to the public for millions of dollars in profits.”

A lawyer’s role in a pump-and-dump scheme often involves issuing an opinion letter that securities are exempt from registration.  Registration allows investors to have all material information about a security before they make a purchase.  The SEC alleges that Czarnick had reason to know that the stock promoters intended to illegally distribute shares of the three companies involved — My Vintage Baby, Inc., Alchemy Creative, Inc., and Beverage Creations, Inc. — yet improperly issued opinion letters stating that the shares were exempt from registration.

If you like to invest in penny stocks pump-and-dump schemes come with the territory.  Before you invest any part of your nest egg in such a stock get a pre-investment investigation from an SEC-trained investigator.