E-mail stock scam making rounds
If you get an unsolicited or “accidental” e-mail stock tip, don’t act on it, federal regulators warn.
By ASSOCIATED PRESS
Published November 8, 2006
WASHINGTON — It’s a new twist on a classic stock scam: enticing people to buy certain stocks with phony e-mails that look as if they were intended for someone else, securities regulators say.
The National Association of Securities Dealers, the brokerage industry’s self-policing organization, issued an alert Monday regarding the so-called “I hope this is your e-mail” scam.
It is the latest variant of a “pump and dump” scheme, where perpetrators talk up small, thinly traded stocks to push up prices so they can sell their shares in those companies at a profit.
The e-mails, made to appear as though they were sent to the recipient in error, often are poorly worded, the NASD said.
An example: “Hi I hope this is your e-mail. I was pleased to meet you the other day. I expect you was excited about New York. So much so much happening all the time, lot of great opportunities. And speaking of opportunities, the deal I was speaking about yesterday involves a company known as (company name) …
“It’s already heading up, but the big news isn’t even out yet, so there’s still time. I have got this shares already and made 2000. I propose you do the same. Hope this helps you out. I’ll see you this weekend.”
The investor alert includes tips on how to investigate a stock before investing in it. The NASD has previously issued alerts urging investors to be wary of “hot” stock tips coming in on their cell phones or phone answering machines.
“The best way to avoid being taken in is to ignore the e-mail entirely,” Elisse Walter, a senior executive vice president at NASD, said in a statement. “And a cardinal rule of investing is to never rely solely on information you receive from an unsolicited source — whether it’s in the form of an e-mail, a fax, a text message or a phone call.”
In July, the government charged three Florida residents with conspiracy and securities fraud in a pump-and-dump scam that used thousands of phony voice mail messages left on the answering machines of households nationwide to lure people to buy specific stocks in the summer of 2004.
The “wrong number” voice mail ploy drove up the combined market value of six small-company stocks by about $179-million in just 26 days, government officials said.
The NASD also urged people to forward stock-spam e-mails to spamnasd.com for review and possible investigation.
[Last modified November 8, 2006, 00:26:26]
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