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SEC Alert: Don't Trade On Pump And Dump Stock Emails

Sunday, June 16, 2013 - 8:26 AM
From the Securities and Exchange Commission:
Email stock spamming is back in high gear.  The latest McAfee Threats Report confirms a steep rise in spam email linked to bogus “pump-and-dump” stock schemes designed to trick unsuspecting investors.

For years, fraudsters have used large-scale email pushes (what most of us call junk email, or spam) to lure potential victims into investment scams.  Many of these emails tout a company’s stock – typically small, so-called “microcap” companies – through false and misleading statements to the marketplace.  

These false claims could also be made on social media such as Facebook and Twitter, as well as on bulletin boards and chat room pages.  Often the promoters will claim to have “inside” information about an impending development, or to use an “infallible” system that uses a combination of economic and stock market data to pick stocks.  Some purport to allow investors to capitalize on a new technology, strike it rich in an emerging economy, or market-time their way to huge profits.  Subject lines and short messages are designed to quickly pique interest and lure investors into buying the stock – all with the goal of creating a run-up in price.

Investors should treat emails like these with extreme caution – they are very likely part of what are called “pump-and-dump” scams.

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pearlbrownpearlbrown1,356 posts since
Nov 2, 2010
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