Pump and Dump

More on Wall Street gaming the system. Rotten to the core. This story suggests that investment bank practice might involve underpricing IPOs initially - and then given allocation to the IPO to preferred specific firms, who immediately flip the stock for profits when price moves upward to match market demand. Instead of the IPO company getting the cash, it's skimmed instead by these preferred clients. In return investment banks require the preferred clients to find some way to return the favor, completing the virtuous cycle. I guess the bottom line here - is firms going to Wall Street to help them raise cash for an IPO shouldn't expect the investment bank to be in their corner, even when they're paying fees to the investment bank to do the job.