Stock Spam Surges

Stock spamming experienced a major surge in 2006, according to a yearly recap and outlook report from San Bruno, Calif.-based e-mail and Web security vendor Ironport. Culling numbers from its SenderBase e-mail traffic monitoring network, Ironport claims that stock spam rose from 10 percent of all spam in 2005 to 30 percent in 2006.

Stock spamming perpetuates the pump-and-dump market manipulation scheme, in which the spammer takes a position on a thinly traded stock and sends millions of unsolicited e-mails with bogus research claiming that the stock is undervalued and set to rise. Ironport points to research from German economists that says these spammers realize a return of as much as 6 percent when they sell the inflated instrument. <<<