Stock Market Spam

Do you get those weird spam emails? The ones that tell you about some stock and how important it is to buy it?



The first "interesting" thing about this spam, is that if you look in the preview window, it does not look like anything about a "stock". It usually contains some random text, that somewhat looks like it makes sense, but when you open it the text is immediatly replaced by some other text (actually it's an image with text in it). Tell you to "watch out for this stock", and the stock symbol, and tell you to invest in it.

When this type of spam first hit in the internet, it made it through a LOT of spam filters and ended directly in the inbox. The reason is simple, the spam filters could not read the text in the image, only the text in the email, which did not appear as spam. Sort of an "evil" way of using CAPTCHA technology

So that's the first part - the question that I pondered for a long time was "WHY?". 99.9% of all spam is trying to sell me somthing. Spammers send mass emails to hundres of thousands of people, to make money. They hope that some percentage of people receiving the email will sign-up/click on a link, buy some product and the 'spammer' gets money. If there NO money in it - there would be a lot less SPAM !

But - if I get an email - telling me to buy a stock, how could this possibly make the spammer any money?

The Answer - "It's called PUMP and DUMP" - and it is an illegal stock market trick. Like most scams, it has been place long before the internet - the internet just makes it easier !

How it works:

The theory is pretty simple - the price of a stock is largely dependant upon the news releases, media information sent out about the stock. The more people that buy a stock the more the stock is "worth" and the price of the stock increases.

So let's suppose, I look at my local newspaper business page, and find a small (penny stock) and purchase 200 shares at $0.05. Normally, I would then sit and "hope" that the company does some amazing things and the price of the stock sky-rockets (say to $50.00 / share). So then I sell my stock and make a tonne of money (My initial $10 investment is now worth $10,000). Of course the odds of a given stock incresing by 1000% is pretty rare?

But what if you could get thousands of people to buy the same stock you did - this would create a "fake" demand for the stock, and thus would make the stock increase.

This would be similar to cheating at a gambling table, or paying off a boxer to loose a race. The race (market) is fixed in your favor and again this is illegal !

So this is how it happens and why you recieve this type of spam. Another name for this idea is known as Microcap Stock Fraud

Now just imagine with all the "evil bots" out there like Storm_botnet and the potential power such botnets could have to control the stock market, and economy of occasions, all by a few little hackers out there directing their hundreds of thousdands of bots to go out and spam others - practically anonmously.

So what can you do?

Thankfully, most spam filters have been updated to detect these types of messages and put them in our spam folders where they belong.

However, the overall strategy remains the same. If you feel you are being sent spam and it is arriving in your inbox

1) Alert your ISP (or sys admin guy), and ask if they an update your spam filters.

2) Use a great spam filter program like SpamBayes to improve your spam filtering

3) Don't under any circumstances, click, buy or purchse anything from the spam email. Again they only do this to make money - if they don't make any money, they will stop doing it!



Link to cool article from shields up too !