Herman Cain, President Trump’s recent nominee to the Federal Reserve Board, has promoted now-worthless penny stocks in frequent emails to his mailing list, according to Media Matters.
Cain, a conservative commentator and former chair of the Federal Reserve Bank of Kansas City, ran for president previously but dropped out of the race when multiple women reported him for sexual misconduct. The Washington Post reported that “Sharon Bialek, who said Cain had reached beneath her skirt in 1997 and tried to pull her head toward his crotch, said Thursday that his record of harassment should disqualify him from the Fed post.”
In his emails, Cain frequently praised penny stocks, which are defined by the U.S. Securities and Exchange Commission as referring “to a security issued by a very small company that trades at less than $5 per share” and says such stocks are “generally considered speculative investments.”
The penny stock market is often plagued with fraud because paid promoters sometimes try to bring up the prices of penny stocks for their own benefit.
In 2014, then-director of the SEC’s New York office Andrew Calamari said "If we had a message to deliver, it would be that this is a very dangerous market for retail investors and that they should tread very, very carefully.”
Cain’s emails touting penny stocks, which are not written by him, promised financial rewards for the now-worthless penny stocks. Those promises included turning "$5,000 into more than $40,000 within a few short months”; making "ten-times your money or better”; and becoming "multi-millionaires in the process.”
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