Penny stock spam scam
Published May 18th, 2007
People behind the spam stock scam typically buy a bunch of penny stock in a company. Next, they send out millions of spam messages touting that stockĆ¢ā‚¬ā€¯typically via computers owned by home PC users. When enough people buy the stock, the spammers sell their holdings and make a modest return.
How many people actually fall victim to these stock tips? A spammer can make a 5 to 6 percent return in just a few days from stock hyped via spam, according to a recent study conducted by researchers at Oxford University and Purdue University. The researchers also found that spam recipients who invest in those same stocks lose about 7 percent of their investment.
In March the U.S. Securities and Exchange Commission (SEC) suspended trading for 35 companies that allegedly benefited from spam e-mail campaigns to hype their stocks.
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