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Lots Of Spam For Stock Pumping Scams
David Utter
Staff Writer
2006-07-25
 Insider Reports RSS Feed
About 15 percent of junk email infesting inboxes around the world contain "pump and dump" scams intended to inflate a stock price quickly and allow the spammers a profitable return on their shares.
 | | Lots Of Spam For Stock Pumping Scams |  |
Speculating in cheap stocks can pay off brilliantly if a relatively unknown company make a big splash with a discovery or an invention. Many speculative investments can remain so for years before realizing any gains, if at all.
The latest spam relaying by country report issued by Sophos noted the rise in email scams that have the intention of shortening the time between "buy low" and "sell high." In January 2005, pump and dump scams were less than one percent of all spam. Now they are 15 percent.
Greed plays a role here, as people looking for a shortcut to a quick payoff tend to fall for these scams. Instead, the spammer already has picked up plenty of cheap shares. New money coming in to the stock only needs to push the price up a little bit so the spammer can cash out at a profit.
Sophos senior technology consultant Graham Cluley also noted in the report that the use of embedded images in spam has increased, as spammers look for ways to beat filtering technology. That applies to the stock scammers as well:
"It's worrying to see so many pump-and-dump emails - often with embedded graphics included - being spammed out to the general public," added Cluley. "The people that act upon these emails aren't skilled investors, and don't realize that purchasing the shares is likely to reap no reward, benefiting only the spammers, while creating a financial rollercoaster for the organization in question."
In the Sophos list of the top dozen spam relaying countries, 23.2 percent of relayed spam came from US-based machines; China and Hong Kong followed closely at 20 percent. Six of the next eight countries are in Europe.
The US percentage of relayed spam may not improve, according to Cluley. With spammers in the US under fire from prosecutors, Cluley thinks it is now more important that home users do a better job of securing their machines, which may be corrupted into acting as zombie spam relays.
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Tag: Spam
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About the Author:
David Utter is a business and technology writer for SecurityProNews and WebProNews.
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