1. The penny stocks fiasco was the result of poor communications, misjudgment and the imperfect system, an independent panel report said.

2. The group, based in New York, Florida and Pennsylvania, used the social networking sites to promote top picks in penny stocks, supposedly based on their own expertise and independent research.

3. What they do not realize is that the results of penny stocks has very little to do with financial reports or fundamental aspects of the companies they are following.

4. For those duped out of the $7 million, the penny stocks touted as "good bets" by the scammers obviously weren't.

5. Other uses of spam have triggered investigations from the Securities and Exchange Commission as people send out e-mails claiming that certain penny stocks will shoot up.

6. As the Securities and Exchange Commission says in its guide for investors: "Investors in penny stocks should be prepared for the possibility that they may lose their whole investment.

7. In the stock market, speculation can be limited to the buying or selling of large amounts of penny stocks with the hope that retail investors might follow suit.