An individual purchases shares of a penny stock, then spreads false positive information about the company on social media to drive up the price before selling. This scheme is known as:

Why D — Pump and dump

A pump and dump scheme involves artificially inflating the price of a stock (pump) through false or misleading statements, then selling the shares at the inflated price (dump). This is securities fraud under SEC rules. Penny stocks and microcap securities are common targets because they are thinly traded and easier to manipulate. A 'short and distort' (A) is the opposite — shorting first, then spreading negative information.