Financial spam, also known as stock spam, is unsolicited mail designed to deliver false financial information. To lure Internet users into their net, spammers don’t hesitate to lure their victims by announcing the forthcoming conclusion of a fabulous contract or the filing of an important patent.
Why respond to financial spam?
During the financial crisis, many Internet users chose to follow up on a financial spam message. They identified the offers made by spammers as the best solution to their financial problems. The main victims of financial spam are debt-ridden homeowners threatened with foreclosure by their financial institution, or households seeking bank credit. Yet these individuals will only add to their problems by following through on the financial spam.
How financial spam works
The aim of financial spam is to artificially influence stock market prices. The principle is simple. After acquiring the shares of a company whose existence is real but whose stock market listing is insignificant, spammers launch a vast mailing campaign announcing the conclusion of a forthcoming merger with a major company, for example.
Faced with this false information, many people do not hesitate to invest their capital in the company, much to the delight of spammers. The latter will have no trouble selling the shares they acquired at rock-bottom prices for an eye-watering sum. Sometimes the share price reaches 500% of their initial selling price in just a few hours.
2005: a black year for the stock market and 2012…
The highest rate of financial spam ever recorded in the financial world was reached in 2005. According to statistics from a computer security software company, 15% of all spam circulating worldwide this year was stock spam. This practice is simply the electronic version of a well-known stock market practice: pump-and-dump. The latter consists of sending out a mass mailing containing the same information, with a confidential mention to formalize it.
Apart from spammers and novice traders, another category of people has contributed to the flourishing of financial spam. These are the people who just take advantage of the opportunity after hearing about the fabulous offers advertised in the junk mail.
Measures taken to counter financial spam
Faced with the scale of the disaster, some companies have not hesitated to issue press releases denying the misleading content of financial spam. But in spite of this measure, it can sometimes bear fruit and lead to a rise in the shares of the companies concerned.
For IT security specialists, the solution is simple. Never respond to financial spam, especially when it comes from an unknown source. Logic dictates that a person who has found a goldmine or an interesting financial opportunity should keep it for himself and not share it with anyone else.