Spammers cashing in on pump-and-dump stock scams - Security Strategy - Breaking Business and Technology News at silicon.com
Spammers cashing in on pump-and-dump stock scams - Security Strategy - Breaking Business and Technology News at silicon.com: "Spam that contains fraudulent stock information has been proven to influence the financial markets, German researchers have found.
So-called 'pump-and-dump' scams, where spammers send out false stock information to encourage people to buy shares, were found to both increase the traded volume and artificially boost the share price, said researchers from Technische Universitat Dresden this week.
In a typical case, share prices increase by around 500 per cent, the researchers claimed.
Three groups of people are involved in the trading. The spammers themselves benefit by quickly selling pre-bought shares, once 'naive traders' have pushed up the share price by buying on the advice of the spam. The third group, dubbed 'smart' traders, recognise that a scam is being attempted and 'jump on the bandwagon' before also quickly disposing of shares, according to researcher Rainer B�hme.
Speaking at the Workshop on the Economics of Information Security in Cambridge, B�hme said: 'Stocks increase in value relative to the short term trend. Pump-and-dump seems to work. People apparently make investment decisions based on incredible sources such as email spam.'"
So-called 'pump-and-dump' scams, where spammers send out false stock information to encourage people to buy shares, were found to both increase the traded volume and artificially boost the share price, said researchers from Technische Universitat Dresden this week.
In a typical case, share prices increase by around 500 per cent, the researchers claimed.
Three groups of people are involved in the trading. The spammers themselves benefit by quickly selling pre-bought shares, once 'naive traders' have pushed up the share price by buying on the advice of the spam. The third group, dubbed 'smart' traders, recognise that a scam is being attempted and 'jump on the bandwagon' before also quickly disposing of shares, according to researcher Rainer B�hme.
Speaking at the Workshop on the Economics of Information Security in Cambridge, B�hme said: 'Stocks increase in value relative to the short term trend. Pump-and-dump seems to work. People apparently make investment decisions based on incredible sources such as email spam.'"
posted by Adrian Eyre at 5:45 PM
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