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Penny Stock Chronicles

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Penny Stock Chronicles

The Intercept,

15 minutes de lecture
10 points à retenir
Audio et texte

Aperçu

Join a Wall Street expert’s quest to find out who or what manipulated his penny stock investment.

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Editorial Rating

8

Qualities

  • Innovative
  • Eye Opening
  • Engaging

Recommendation

Chris DiIorio was not an uneducated investor or unfamiliar with the financial markets. Yet in 2006, the former Wall Street equity trader found himself on the wrong side of a speculative penny stock investment, quickly losing $1.3 million in paper value. DiIorio vowed to learn the reasons for the boom in his stock pick and its ultimate demise and to discover the truth about the financial actors behind the scenes who manipulated his investment. Journalist David Dayen, who has written numerous articles as well as a book about financial fraud, pens a rich seven-piece narrative on DiIorio’s 10-year obsession. getAbstract recommends Daven’s account of DiIorio’s unproven but convincing analysis to investors, especially those thinking about penny stock investing.

Summary

Part I: “The Money Is Gone”

In 2006, Chris DiIorio was 39 years old and a seasoned investment professional. He’d been an equity researcher, providing guidance to portfolio managers. Before then, he had worked on Wall Street for many years as an analyst and trader with the investment firm Donaldson, Lufkin & Jenrette, where he routinely conducted large-scale equity buy/sell operations for massive institutions such as Fidelity and Putnam.

DiIorio had significant expertise in traditional stock markets, and he knew how to investigate and analyze heavily traded companies in highly regulated and transparent markets, such as the New York Stock Exchange. However, in 2005, DiIorio ventured into the hazy world of penny stocks – shares of small and fledgling companies trading at fractions of a penny to up to $5. Penny stock trades don’t take place at the formal exchanges but on an electronic exchange known as the Pink Sheets, or the over-the-counter (OTC) Bulletin Board market. In contrast to the shares of major companies regulated by the US Securities and Exchange Commission (SEC), penny stocks are unregulated and tend to be extremely volatile.

DiIorio believed in ...

About the Author

David Dayen writes for The Intercept, Salon, The Fiscal Times, New Republic, and other publications. He is the author of Chain of Title, a book about three ordinary Americans who uncovered Wall Street’s foreclosure fraud.


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