14 DAY TRIAL // SophosLabs experts have announced in a press release that the Securities and Exchange Commission (SEC) has filed civil fraud charges against a married couple from Greenwich, Connecticut that have allegedly performed stock spam scam. SEC accused Jeffrey Stone and his wife Janette Diller Stone of ending up with a profit of 1 million dollars following a stock market pump and dump scam in relation with WebSky Inc. Sophos has revealed that an estimated 15% of spam is comprised by pump and dump stock campaigns.
"Pump-and-dump stock campaigns work by spammers purchasing stock at a cheap price and then artificially inflating its price by encouraging others to purchase more - often by spamming "good news" about the company to others," stated Graham Cluley, senior technology consultant for Sophos. "Stock spam is becoming increasingly attractive to internet criminals because of the large amounts of money that can be generated. Private investors need to be wary of believing financial advice they receive in their inbox, because it could be designed to only benefit the criminals who spammed it out."
The couple owned 288 million shares of WebSky Inc and generated a spam campaign that reported a $40 million annual revenue for the company via an Argentinian venture. The spammed news artificially increased the stock by 300% and catalyzed the trading of 234 million shares.
"Charges were also brought against Douglas Haffner, CEO of WebSky, for selling stock to the Stones in a subsequent deal without registering the sale or obtaining an exemption from registration, according to the SEC. Without admitting or denying the action, Haffner and WebSky settled by agreeing to surrender the $35,000 gained from the sale and to a permanent injunction against violations of the registration provisions of federal securities laws," reported SEC.