Pump & Dump Spam Scam gets action

Pump and Dump ImageIn their biggest strike ever against online investment scams, US regulators on Thursday shut down trading in 35 over-the-counter stocks that have been the subject of spam e-mails touting their investment potential.

Christopher Cox, the Securities and Exchange Commission chairman, estimated that more than 100m stock-touting e-mails are sent each week.

The majority are pump-and-dump schemes in which stock promoters buy penny stocks and try to resell them to gullible investors at higher prices. The most successful campaigns can significantly move stock prices.

My honeypot email accounts attract way too many of these emails. The quality of the spam machinery for distributing and creating these emails is very high which shows that the scam is working and making someone a lot of money.

Pump and Dump ImageTo you and me, the ‘pump and dump’ spam emails just look like poor quality mages (See inset) in a misleading email message and subject but there’s a good reason the image is ‘grainy’. It’s to disguise the digital fingerprint of the image, making it all but impossible to identify them with anti-spam software.

According to the SEC website, you can forward any of these emails you get direct to them for investigation:

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