The Mystery of the Pump-and-dump Spammers

[Ian David]

Thursday, 30 November 2006

Spammers as scammers
Topic: Stocks,Web/Tech

When you're an over-the-counter stock not traded on the New York Stock Exchange or Nasdaq, there's a presumption among many that your business isn't on the up and up. That perception is doubly difficult to overcome when you're one of the dozens of penny stocks being touted in spam messages that regularly get blasted across the globe.

Just ask executives at Vemics, a River Edge, NJ-based provider of video conferencing and data services. Since March, it has been the subject of more emails than they can count, and each wave draws a rash of calls to the company from outraged recipients who want to know why their inboxes are littered with spam claiming Vemics is the next big thing.

<snip>

Vemics is by no means alone. Other companies being targeted include Bralorne Mining, Advanced Powerline Technologies and West Excelsior Enterprises. "Grab BLMN first thing Tuesday morning and turn some serious profits," a spam message that circulated this week raved about Bralorne Mining. "Buy it on Tuesday, become rich on Friday."

<snip>

Stout speculates that the person or people responsible buy the stock, send the mass emails and then wait for the shares to rise so they can be sold at a tidy profit. Once the share price goes back down, the cycle starts all over again.

I'm wondering about the forensic remedies available to companies like Vemics. Is it really impossible to track these spammers down? If you have more info about these scams, please email me at [e-mail].


More:
http://blog.wired.com/business/2006/11/when_youre_an_o.html

On a personal note, I have been SWAMPED with spam from these assholes. They apparently are doing a dictionary-attack-based spam of Gmail and other email services.

[Nikki Stone1]

1. I've recently received a lot of stock related spam

Now I have a clue as to why.

[Ian David]

11. Here's what a Pump-and-Dump is (short and simple version)

1) Scammer starts buying a whole bunch of really cheap "Penny Stock" in a company that trades for about a nickel a share.
2) Scammer sends out literally millions of spam emails saying, "Wow! This stock is going to go up, up UP through the roof!"
3) A very small percentage of people reading the email decide, "Hey, I'm going to buy some of that stock!"
4) When the email recipients purchase that stock, the value of the stock goes up.
5) The spammers who "pumped" the stock, then sell all their shares in it-- they "dump" it.
6) The value of the stock then plummets back to it's old level or less. The only ones who make money are the scammers.

That, in a nutshell, is the "Pump and Dump."

Edited to add:

Besides ripping-off people stupid enough to invest in something they saw in a spam, it has other consequences:

1) It creates the false impression that the company being "pumped" is involved in the spam and scam
2) It makes their stock performance look more "volatile" and may discourage serious investors that could have helped the company.
3) It also hurts people who may have invested without knowing the stock was being pumped-and-dumped.

[Warpy]

2. When I buy online

I give variations of my name. That way, I can tell who is selling my email address.

Some outfits have been pretty good while others have been awful. It's impossible to tell who's who before getting the spam and looking at the salutation.

I don't get much brokerage spam, odd considering I use MarketWatch. I guess those guys were telling the truth in the standard privacy statement on their free download (something I recommend for small investors, it's pretty neat). Other companies I've ordered paid goods and services from have sold my email address to spammers.

On edit: consider getting a trash email address for online purchases. That's the other thing I did. It cuts way down on the spam hitting my primary email.

[area51]

6. throw-away email addresses

SpamGourmet is nice for throw-away email addresses.

[Ian David]

9. I use Netmails.net for my disposable email addresses. n/t

[Warpy]

13. Thanks!

I have four addies right now for separate purposes. I'll keep that one in mind for the future, bookmarked.

[lumberjack_jeff]

8. sneakemail works for me. n/t

[Pharaoh]

3. Yes I've gotten tons of it lately

I figured it was a pump and dump scheme, greed is running rampant in the US.

[Jed Dilligan]

4. There's them, and then there are the really weird ones

Not pr0n, not v1agra, not anything discernible. The ones with subject lines like "rejection thousands" and text like "Stonepop agetop sydney morning. Invented granted response groups."

My only guess as to the origin of these is that they're disseminated by the marketers of anti-spam software.

[mikeytherat]

5. Here's one I got just yesterday:

you... play.. addicts scum...

Step meetings of aa na. Residual income Dvds itunes tend direction exciting defined is.
Commenter amusing Polish above membership or again Forgot passwordor Profileor?
Reason of sorry quit whenever.
Forgotten passwords Cneter unused menuimpng.
Charged in rehab detox juvenile. Geeking more smashed or squarly in nose flooded shirt ashe.
Cyrstal worse downs a arnt quite or dumb a know. Recently aol supported primary growth Apples Store. Drag am rearrange page editadd of. Donald Clarke ancestors another onesong is?
Tribune Baltimore or sun raw Storyall sends am confession letter his. Tale teengirl angst song dj Ivan forwarded.
Chip asked or Maximum same.
Person am frozen in if have or This is.
Courts need toughe!
Chip asked or Maximum same.
Targets or Reducing Theft is Lives caught carvideo manall manvideo cardo. Cd more Alps Epiphone les w Ernie.
Smokerbc Targets Reducing Theft.
Important in contacts traveling reporting events older experience Extensive verbal? Battle begins Punch Jumpall=RCRD( Scotsman Pretoria Whdhtvus of Military in. Mayweather in Twins Liriano quotagain in Arsenal failed.
Quality or Critics in corporate is managers is logical calculated decisions. Mayweather in Twins Liriano quotagain in Arsenal failed.
Attached malformed incorrect?

SPAM e-mail or existential poetry?

mikey_the_rat

[Jed Dilligan]

7. Was there a virus attached?

Sometimes there is, sometimes there isn't. I get about thirty of these every day. If I were just a little more paranoid I think they would really freak me out!

[IMayBeWrongBut]

12. I get these too

I was thinking it could be a way to send encrypted messages secretly. To avoid the obvious send and an encrypted message to your secret contact which may expose that contact just send the encrypted message to everyone in the whole freaking internet...we all could be receiving plans for the next terrorist plot or covert intelligence agency action in our email and never know it.

[OneBlueSky]

10. the trouble with unlisted stocks is that you're buying a pig in a poke . . .

because they're not required to file with the SEC, you have no idea how many shares are outstanding, what their balance sheet looks like, or anything about their cash flow . . . not saying that all are not on the up and up, just that you have no way of knowing . . . good way for inexperienced investors to get burned . . .