August 4, 2005 7:01 AM PDT

It's a bull market for stock spam

The volume of stock scam spam has risen, posing a new threat to investors, warns a new study from network security firm Sophos.

Though traditional spam categories--medication, mortgage and pornography--continue to dominate, new ones such as stock scams are growing, according to the study, which covered the first six months of 2005.

Medications, including unbranded versions of Viagra, accounted for 40 percent of all spam traffic, the study said. This was followed by mortgages at 11 percent and porn at 9.5 percent. Stock-related spam came in fourth place at 8.5 percent of the total spam traffic. The volume of "pump-and-dump" stock scam e-mail has increased at an average rate of 10 percent per month, the company said.

"The purpose behind the pump-and-dump stock racket is to quickly and cheaply disperse false information about a company's stock, along with information obtained from recent press releases, to potential investors via e-mail," Gregg Mastoras, senior security analyst at Sophos, said in a statement. "Typically targeting microcap companies' stock, once these fraudsters dump their shares, and then stop advertising the stock, the price often falls, and investors ultimately lose their cash."

Sophos said stock campaigns usually run for short periods. Though some of the information given is accurate, the deceptive and unsolicited nature of these e-mails qualifies them as spam. They generally use word variations such as "st0ck" or "stox" to avoid being stopped by spam filters.

Stock scams, combined with traditional phishing techniques, can result in significant financial loss for victims of these swindles, the security firm said, quoting IDC analysts.

5 comments

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I've received these. Why would anyone answer them?
I get these in my spam filter daily. What I wonder is who in their right mind would even bother to deal with these?
Posted by R. U. Sirius (745 comments )
Reply Link Flag
People want to
get rich quick. Although there's no excuse to think that you do so through a mass mailed piece of unless you know nothing about e-mail, which some people do.

My boss asked me once to "investigate" one of these companies, and he has an MBA (ok it was 2000), but still after I found out how he heard about it I let him know.
Posted by sanenazok (3449 comments )
Link Flag
Because the nitwits answer
That's why we have a spam problem in the first place. If *everyone* stopped replying to spam then it wouldn't be long before there would be no more spam at all. But because some nitwits continue to answer spam mails, the spammers continue to send them.
Posted by 202578300049013666264380294439 (137 comments )
Link Flag
Stop Stock Spam
I created a <a href="http://www.stopstockspam.com">website</a> that actually tracks the performance of these spammed stocks on the short term (rather than on the long term where clearly you would lose money the majority of the time). I hope to demonstrate the obscene profits that these spammers are making. Please let me know what you think!
Posted by stopstockspam (1 comment )
Reply Link Flag
Possible SPAM
DO you know if the stock IAUS was one of the 35 companies (or even more tah 35) that the sec is looking into bc I DID NOT SEE IAUS as being at least one of the 35 (unless i just plain missed it)
Bc to put it bluntly AT THIS POINT I DONT WHETHER IAUS WENT DOWN BC IT WAS PART OF THE PROBLEM (being a co that is spamming us)
OR a LEGITAMITE Co. That was PERHAPS unfairly being pulled down with the other pink stocks (wrong place wrong time)
OR DO YOU KNOW FOR A FACT THAT IAUS WAS AND IS PART OF THE SPAMMING_DUMPING AND PUMPING SCHEMES
Posted by farkas1 (2 comments )
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