Pump-and-dump e-mails jump: Regulators
June 13, 2013 by Mark Schoeff Jr.
Securities regulators warned today that the number of online pitches about bogus investment opportunities are increasing.
The Securities and Exchange Commission and the Financial Industry Regulatory Authority Inc. said that e-mail spam designed to dupe investors into “pump-and-dump” stock offerings is proliferating.
“E-mail stock spamming is back in high gear,” the regulators said in an Investor Alert, citing a recent report by McAfee, a computer security subsidiary of Intel Corp. These messages also are being sent through social media, such as Facebook and Twitter.
The fraudulent marketing often involves “microcap” companies, according to the alert. Promoters claim to have inside information or special access to new technology or investing strategies in the hopes of luring in investors and driving up the company’s stock price. They then turn around and sell the shares for a profit.
“Don’t fall for these scams,” the alert states. “They are the ‘inbox’ equivalent of a boiler room sales operation, hounding investors with potentially false information about a company. Just hit the delete key.”