Investors tricked over stock spam

The stock value of a company targeted by a spam campaign rose 12 per cent in a single day, according to security experts.

Spammers purchased stock in the unnamed company at a cheap price and then artificially inflated its price by emailing ‘good news’ about the firm to others before selling at a profit. Investors fooled by the scams are often left with heavy losses.

A spokeswoman for industry regulator the Financial Services Authority (FSA) says these scams are very difficult to prevent.

‘The shares are often small US stock, so their price can shoot up rapidly. It’s very difficult to track these emails as they are often generated from outside the UK and therefore outside the FSA’s remit,’ she said.

Luis Corrons, director of vendor PandaLabs, which conducted the research, says these stock scams are becoming increasingly sophisticated.

‘Attacks of this nature in the future could not just be for direct profit but also as a weapon against companies, similar to the way in which companies are blackmailed with threats to crash their IT systems,’ he said.

Security vendor Sophos reported last month that spammers have approached companies saying they can boost stock prices by up to 250 per cent using junk mail. Sophos says these stock campaigns account for 15 per cent of all spam.

Peter Firstbrook, research director at Gartner, says this is not a new phenomenon.

‘This has been going on for a while. It can be difficult to intercept using content-based filtering because it is not unique. Moreover, a lot of this type of spam is image-based, which makes detection difficult.’

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Spam laws fail to measure up