Pump and Dump is a form of securities fraud where perpetrators artificially inflate (“pump”) the price of a stock or token using misleading statements or hype, then sell (“dump”) their holdings at the higher price, leaving others with losses when the price falls. In compliance and diligence, Pump and Dump risk is a red flag around promotions, influencer marketing, thinly traded securities, and certain crypto projects, and Pump and Dump allegations can trigger regulatory enforcement and reputational damage.
