Scheme:
(1) The perpetrators have an asset class of low value.
(2) The perpetrators inflate the price of the assets by one or more means ("pump").
(3) The perpetrators sell their stake at the inflated price ("dump").
(4) Usually the price collapses afterwards.
Ways of inflating the price:
(1) making purchases of the asset at ever increasing levels thereby creating an upward trend
(2) using a "boiler room" or social media to coerce investors to buy the asset
(3) creating a mini-mania about the stock using false, misleading or exaggerated claims
This is an example of buy low and sell high, but the higher price is driven by fraudulent practice.
Features of the asset that make it attractive for a pump-and-dump scheme:
(1) little if no independent or accurate information about the asset
(2) illiquid
(3) difficult to short
(4) name attractive to inexperienced investors