Or, “Answers to Questions You Did Not Ask About Stock ‘Pump-and-Dump’ Scams”
Checking my spam filter just now, I noticed this email (from “Hermann Snell” at a fake .edu address), which had no images or files attached:
bald eagle aroma portend core
Check A R S S right now, stockjobbers drop the price, it’s time to get in
and get profit!
custom flip side foretold toothbrush
That’s it. As you can see — between the nonsense at the top and bottom, which happens to have the right number of syllables for a classic haiku — Hermann is trying to tell me that I should ask my stock broker about “ARSS.”
This stuff makes me crazy. I understand that regular spammers, whose typical inventory includes penis pills and counterfeit software, probably have enough of an interested market to make a few sales with every million targets. But my gut feeling has always been that people looking for stock tips were a little savvier than people buying C1aL!5 tabs on their coffee breaks.
Or so, for the sake of my wary faith in capitalism and market efficiency, I have hoped.
Another, equally powerful, gut feeling has always told me that nobody would go to the trouble to send these things if they didn’t work. As a New Yorker piece on Nigerian bank scams made clear several months ago, there really is a wealth of suckers out there.
(Related: Campaign managers always seem to think it’s critically important to post volunteers outside polling places on Election Day. I don’t want to believe this works, but why would they do it if it didn’t?)
Anyway!
Hermann’s email is the key ingredient for what’s known as a “pump-and-dump” scam, in which the spammer encourages lots of people to buy a low-traffic, mostly worthless stock in order to temporarily inflate the price and make the seller lots of money.
As you will have guessed, and as should be obvious to anyone even thinking about getting near a securities market, this is a no-win for buyers. But apparently it isn’t so obvious. A study published in April found that these emails reliably produce the very movement that their senders expect, and at least one guy has made a project of tracking just how well it works. This description of his results comes from the April study:
Cyr runs a Spam Stock Tracker since March 2005, where he keeps track of the performance of securities that have been advertised in spam messages. For each unique stock, he adds 1,000 shares to a fictive portfolio. As of March 15th, 2006, he (virtually) suffered a net loss of US$27,827 bar transaction costs.
So keep deleting them, I guess, unless you’re the type of person who takes stock tips from street mumblers or German Dadaist poets — I know you’re out there.