Brokers pitch penny stocks to customers in high volume despite its questionable returns. Once the buyers dry up, the firm ditches its shares for a big profit and drives stock prices. That results in huge losses for customers and is, unsurprisingly, illegal. Brokers fraudulently pump the price of a stock by providing misleading or false statements about the company. That creates demand, which increases the price of shares. Those fraudulent brokers contact customers through e-mail and social media channels. Investors or company insiders sell their own holdings of a stock, dumping shares into the market and causing the stock to plummet.