Wednesday, December 06, 2006

Pump-and-Dump Scam

I have been deleting at least a dozen identical emails a day lately. The emails promise me vast riches if I get in on the ground floor of some hot new stock. The emails are getting past my spam filters. Here is one that I received today:

These days it's like the dot com revolution round two. The only difference is, this time there will be no crash. Everyone is wiser and the internet has already proven that it is THE place to do business.
Acquisitions are happening at a record pace. Google picking up Youtube. News corp picking up Myspace, the list goes on.
In all of these acquisitions those that are already holding an interest in these smaller companies are making a fortune in the process. Word on the street is that our next pick is about to be acquired by a big player!
[Name of stock deleted]
Current Price:
Target price: 1.35
[Name deleted] is a high tech company involved in a wide range of internet related businesses from broadband to online commerce. This is one hot item!
Remember, we get you the inside scoop BEFORE it hits the street. With the acquisition set to be announced shortly the time to act is now. Once the word is out it will be too late to get in, as we expect this one to go up quickly.

Is there money to be made here? Sure, for the crooks sending these emails. They get enough people interested in buying the stock to get the price up, and then sell. The investors are then left with worthless stocks. The pump-and-dump scam is not new, but spam emailing makes it easier and potentially more lucrative for the crooks.

The emails are clever. I think that they appeal to more than just greed. They appeal to the desire among us to be in-the-know. It is as if someone has chosen to give me some special inside information. Of course, the email is sent to thousands of people. I am really not special to the crooks sending out this email.

I will continue to just delete these emails. I hope you do too.

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