How Pump and Dump Scams Work
A Pump and Dump stock scam is a get-rich-quick scheme for scammers, not for legitimate investors. Often, the scammers are people who buy or own shares of an over-the-counter (OTC) "penny stock".
The Pump: The scammers broadcast fake news that the stock price is about to soar, giving one made-up reason or another. The message also has an urgency with a short timeline, like a matter of hours or days. Unwitting investors snap up the stock in the hope of getting rich quick, sending the price up. That's the "pump".
The Dump: When the price gets high enough, the scammers dump their shares, taking a nice profit, and often sending the shares plummeting as word takes hold and nervous victims flee. That's the "dump".
Email Stock Scams
Email pump and dump scams are very efficient and can be very effective. They are difficult for many automated antispam systems to block, because they often don't have strong spammy characteristics that traditional Bayesian heuristic algorithms use to identify spam. So, those systems tend to miss a lot of these and learn slowly.
How to Spot this Stock Spam
This campaign (so far) has two configurations. Both use a long subject with an all-text (no HTML) email. No links, no graphics and no attachments
The two subjects we've seen, that you might want to look for are:
Subject: Let me tell you why this stock will go up 10x by next week.
Subject: Here's why this company's shares are about to go up tenfold next week.
The body is simply a long paragraph explaining the sender's connections and why the stock price is about to soar and advising to not to tell too many people. Here is one:
Haven't heard from me in a while right? That's because I'm not one to waste your time. Whenever I do email you, it's because I've got something good. Really good. My good friend who works at the big VC out in NY invited me for a bite yesterday. Nothing unusual, we always eat lunch together right? However yesterday he gave me a really amazing piece of information and I want to share that with you...
It goes on and on, trying to lull the reader into a false sense of security, and then suggests buying up shares of "Bella tora Inc." with the symbol "E C G R". Both the company name and the stock symbol included extra spaces between the letters, probably to fool some antispam systems (not us).
Obviously, we're not making any value judgments about Bellatora, Inc or its stock (ECGR). They may both be perfectly legitimate. All we're saying is that you *might* want to check with your broker before making investment decisions from a free email that somehow found its way to you.
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