Business Daily from THE HINDU group of publications
Thursday, Aug 30, 2007
ePaper
Business Daily from THE HINDU group of publications Thursday, Aug 30, 2007 ePaper |
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Info-Tech
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E-Mail Markets - Stocks
About 500 mails were circulated advising people to invest in a US firm Fraudsters invest in the shares of a company, engineer a spam campaign and raise the price After their expectations are met, they sell their holdings for huge profits
L.N. Revathy Coimbatore, Aug. 29 Have you ever been tempted to invest in shares of companies based on email advice? If so, be cautioned, for spammers have recently struck back by letting loose online stock manipulation campaigns. According to details available here, an estimated 500 million emails were circulated around the globe, advising people to invest in a listed company in the US. And, a German IT security company claims to have detected this first. The fraudsters employ the pump-and-dump spamming technique, wherein they invest in the shares of a company, engineer a spam campaign and raise the share price. After the spammer’s targeted expectations are fulfilled, he offloads his holdings for huge profits. IT security firms have estimated the pump-and-dump stock campaign to account for 25 per cent of the spam at present. It has risen from one per cent in January 2005 to its current volumes. “With online commerce on the rise, such spams increasingly impact the consumer/user behaviour. Although the penetration of technology is yet to take off in a big way in India, the new income group are a vulnerable lot. They spend beyond their limit and are susceptible to risk,” says Mr Srikiran Raghavan, Regional Sales Head, RSA (the security division of EMC). Expressing concern over such developments, he pointed out that the stocks of 30 to 35 companies in the US were frozen (from being traded) in the recent past. “A number of gullible investors lost heavily.” Though the share-ramping spammers have been targeting small stocks, their foray into big league cannot be ruled out. The biggest challenge for companies now is in securing the data and controlling the Pump-and-Dump spam among a host of other technology related threats, says Mr Raghavan. Slip side
“The slip side to this development is the risk the fraudster would have to take initially by investing his own money. But when millions of mails are sent everyday, even if one per cent of the recipients respond, the sums amassed would be phenomenal,’ he said. While such incidences are still not common here, people continue to respond to the Nigerian spam and pump-and-dump spam to make quick money, he said and pointed out that the fraudsters use ‘blackmail tactics’ by threatening the CEOs of smaller companies if they failed to relent to their demands.
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