TY - JOUR T1 - Microcap Deception JF - The Journal of Investing SP - 19 LP - 24 DO - 10.3905/joi.2000.319378 VL - 9 IS - 3 AU - Richard Chen Y1 - 2000/08/31 UR - https://pm-research.com/content/9/3/19.abstract N2 - The prolonged bull market has garnered the interest of an amazing variety of small investors. Many invest in small startups hoping to discover the next Intel, Cisco Systems, Dell computers, or Microsoft. Unfortunately, the bull market has also created a new breed of con artists who create investment scams aimed at neophyte investors. The majority of stock fraud occurs in microcap or penny-stock issues. Unlike NASDAQ or NYSE stocks, these thinly capitalized companies often do not file periodic audited financial statements with the SEC. This article examines the microcap stock fraud schemes through which swindlers have deceived many ingenuous investors. It then presents a fraud case of Eltro-optical Systems. Finally, it offers some suggestions that may prevent the swindlers to defraud novitiates. ER -