Largest Pump-and-Dump Scam in History

In case you’ve somehow missed it, what is almost certainly the largest pump-and-dump stock scam in history is underway. A giant online bot network (a good chunk of which was just created by the recent greetings card spam) has upped global spam levels by 30% this week alone, largely in support of a single stock.

Why do these silly spam campaigns persist for penny stocks? Because the damn things work. The stock of the company in question is up more than 60% since last Friday.

More here.


  1. Paul, this is a huge problem in our industry. Fighting the botnet owners is impossible (we all remember the infamous Blue Security story –
    The answer, I believe, is quite simple. The SEC should halt trading in such companies for a period of 48 hours and issue a press release explaining the company is the target of a botnet spam campaign. This puts an end to all transactions and kills the quick profit motive.
    Moreover, the press release itself could be used as an educational piece for investors that were planning to buy stock as a result of the campaign. By training them not to respond to such spam in the future, we can hopefully dampen future profits of spammers.
    Does this hurt the company?
    Companies often claim they are unwitting participants of such spam campaigns. If so, we are doing them a favor by halting trading for 48 hours and inheriting thousands of pissed off investors now holding paper of a company that is not going to increase by “500, 600 even 1,000%”.
    For those companies that are secretly complicit, shutting down trading for 48 hours and killing any momentum in the campaign will prevent them from engaging spammers and losing money in the future.
    I’ve put a call into the SEC on this matter. In addition, I have sent e-mail to the company asking if they will issue a press release disavowing any knowledge of the campaign.

  2. George in the above post is absolutely right.
    Theft like this is precisely why the SEC was created by section 4 of the Securities Exchange Act of 1934.
    The SEC is currently guilty of a colossal incompetence, ignorance and negligence.
    I am very angry, and you should be too.

  3. Hi, Andi. We definitely share the same frustration. Imagine all the legitimate small guys that have to avoid being tainted with this paint brush.
    On the other hand, though the SEC moves slowly, I do give them credit for making a great move this year with SEC Operation Spamalot. Shutting down trading for 48 hours in companies that pass a certain spam threshold may be the next weapon in the arsenal.
    (Fun Fact – the operators of the Spamalot show sent a cease and desist order in late June to the SEC and ourselves to no longer use that name).

  4. i wish a bot-herder would pump&dump one of the penny stocks that i own! ive got a great candidate – pm me :)

  5. The SEC suspended trading on 35 companies in March of this year. Has this helped? Not to my experience. I stand by my invective because my mailbox remains stuffed with pump and dump spam. The differnce between the scammers and the legitimate operators is not subtle to my eyes.
    SEC officials Christopher Cox, Linda Chatman Thomsen, Mark K. Schonfeld et al claim to be working on the problem but their efforts are not apparent here. One would think that if the SEC truly posed a threat to these criminals the crimes would not continue so blatantly.
    Other than that I’m having a nice day, thanks for listening. :)

  6. Sadly, we all know that if you commit p&d fraud, you have a better chance of being struck by lightning than of being convicted. From that perpspective, it’s virtually all upside, with no real risk, and hence, about the safest criminal enterprise you can engage in.
    I wish it were otherwise, but here we are.

  7. >>> about the safest criminal enterprise you can engage in.
    Yeah, I suppose pointing out the SEC’s complicity by looking the other way is more dangerous than actual P & D crimes.

  8. The best thing we can do is keep each other in the know. Make each other aware and develop a network of sites that can ultimately slow this down. I don’t think it will ever be stopped, but you can put a dent into the penny stocks scams with mass awareness.
    I have been working on my penny stock blog and I will try to incorporate a list of hucksters to beware of…this would have to be quite extensive.
    Stop by and say hi if you want at
    See you on the flipside!