Bitdefender warns of 'Wolf of Wall Street scam'
Three million spam emails sent in a single day by scammers taking part in this 'pump'n'dump' scam.
“You've been patient for a while now and finally it's time. Confederation MineraIs (CNRMF) is on the verge of exploding.”
That's the opening line of a spam email. And it's everywhere. Malware solutions provider Bitdefender estimates that some three million unwanted messages just like this arrived in one day earlier this week.
It's our old 'friend' pump'n'dump, where spammers grab hold of a stock that's valued at a few cents a share, boost its prospects (the pump), see the price rise, which is not difficult if there are several purchases in rarely traded equities, and then sell at a profit (that's the dump).
The new Wolf of Wall Street
Bitdefender has dubbed this latest spam epidemic as the new “Wolf of Wall Street” - a reference to the film starring Leonardo diCaprio. It says: "These are today's most vicious wolves of Wall Street. They no longer call potential investors to inflate stock values, but use a faster approach - email spam replicated in millions of samples. Our studies showed no targeted spam attack works better than a massive wave, naturally selecting the most gullible victims."
The US Securities and Exchange Commission has also warned that stock spam messages are proliferating this year, representing the "inbox equivalent of a boiler room sales operation".
Appalling claims
Confederation is a Canadian mining company with publicly quoted shares. It – and other companies currently used in this scam – has no part in the activity. Once stock is available on the markets, whether you're a small company or global giant, you cannot control your share register. Small companies, here and in the US, have always been prone to share manipulation attacks.
Confederation's directors are appalled by statements in the spam such as: “It has hundreds of millions (sic – the word tonnes is missing) of precious metals on their property and they are weeks away from beginning to dig it out and selling it up the distribution chain.”
They point out that this is simply not true. If the business was that close to making money, they would have had to inform stock markets by now. Mines cannot easily be turned on and off, in any case.
But that does not stop the spammers coming up with “It is trading at such a bargain right now that CNRMF is a no-brainer. Snap up as many shares of it as you can today before it goes up too high. Everyone is certain that we will see it hit past 40 cents before month's end.”
It won't – and sellers will be lucky to get three quarters of whatever value it stands at.
The reality is Confederation has lost over $7 million in three years, with no suggestion of a turnaround. With under a fortnight to go before the end of the month, it trades at seven cents.
Rich Pharmaceuticals is also on the Bitdefender list. It was also pumped in April. Its directors bluntly say: “We do not anticipate earnings revenue until we can sell or licence our products. There are substantial doubts about our ability to continue as a going concern.” In May they said: “As of December 31, 2013 and the date of this report, we have insufficient cash to operate our business at the current level for the next twelve months and insufficient cash to achieve our business goals.” Hence the two cents a share quote.
Bitdefender also warns against the pumping of Rainbow International, once in mining but now in hemp hoping for more marijuana liberalisation.
Rainbow was pumped in May when the small print in the email said an stock promoter had paid a spammer firm $420,000 for posting emails for a month. The spammers pretended to be from Fox News. Bitdefender points out that stealing the identities of Fox, Bloomberg, Reuters or the Financial Times is common in pump'n'dump.
Inspiration Mining, another Canadian company, is also on the Bitdefender spam list. It was pumped in May when the price was 17 cents a share – it's now six cents. A spam organisation was paid $500,000 to push the shares.
There is a very simple rule here. Delete unsolicited share tips. The only person who makes money is the crook paying for the spam. You will lose.
More on scams:
FCA campaign to stamp out investment scams
Banks launch fraud awareness campaign
Huge rise in remote banking fraud
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